Bevan v Carmody

Supreme Court of NSW|2010-04-15|Before: Ball J, Nicholas J, Brereton J

CITATION : Bevan v Carmody [2010] NSWSC 356

DECISION : The Defendant's motion filed on 25 July 2008 dismissed with costs.

CATCHWORDS : PRACTICE AND PROCEDURE - Determination of Separate Questions - Where there is an overlap of facts between issues

Legal Profession Act 1987 LEGISLATION CITED : Legal Profession Act 2004 Supreme Court Rules 1970 (NSW) Uniform Civil Procedures (UCPR) r 28.2

Amirbeaggi v Business in Focus (Australia) Pty Ltd [2008] NSWSC 421 Burbidge v Wolf [2008] NSWSC 60 CASES CITED : Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 Tepko Pty Ltd and Others v Water Board (2001) 206 CLR 1 Tudor Developments Pty Ltd v Makeig (2008) 72 NSWLR 624; [2008] NSWCA 263

PARTIES : Christopher John Bevan (Plaintiff) John Edward Carmody (Defendant)

G Lindsey (Plaintiff) COUNSEL : D Rofe SC (Defendant) A Tudehope (Defendant)

SOLICITORS : Evangelos Patakas & Associates (Plaintiff)

1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

2006/262554 CHRISTOPHER JOHN BEVAN V JOHN EDWARD CARMODY

JUDGMENT 1 HIS HONOUR: The Plaintiff in these proceedings is a barrister who claims from the Defendant, his Instructing Solicitor, fees totalling approximately $500,000 together with interest on that amount. It is alleged that the fees were incurred at various times between 1999 and 2006 in respect of work done for a number of clients of the solicitor. The Defendant has filed a Cross Claim in the proceedings seeking to recover certain amounts from his clients in the event that the Plaintiff is successful in recovering those amounts from him. 2 There are provisions in both the Legal Profession Act 1987 (the 1987 Act) (which is now repealed but which is relevant to the earlier fees claimed by the Plaintiff) and the Legal Profession Act 2004 (the 2004 Act) (which is relevant to the later fees charged by the Plaintiff) which prevent a legal practitioner from maintaining proceedings to recover costs if the legal practitioner fails to meet certain disclosure obligations set out in the Acts until the costs the legal practitioner is seeking to recover have been assessed. In addition, s 192 of the 1987 Act prevents a legal practitioner from commencing or maintaining legal proceedings unless at least 30 days have passed since a Bill of Costs was supplied by the legal practitioner in accordance with that Act. The Acts also prevent a legal practitioner from charging interest unless certain disclosures are made. 3 The Plaintiff pleads that he has complied with the provisions of both Acts so as to permit him to maintain these proceedings and to claim interest. 4 In the alternative, the Plaintiff alleges that, even if he failed to comply with the requirements of the Acts, the Defendant is estopped from asserting that the Plaintiff has not complied with the legislative requirements or that the Defendant has elected not to rely on his rights under the Acts or waived his rights to do so or, finally, is liable to make restitution to the Plaintiff for fees he (the Defendant) has recovered from his clients in respect of the Plaintiff's fees. 5 The Defendant says that these alternative claims cannot be maintained in the face of the provisions which prevent a barrister from maintaining proceedings where he has failed to comply with the disclosure requirements of the 1987 and 2004 Acts. He relies, in particular, on the decisions of Nicholas J in Burbidge v Wolf [2008] NSWSC 60, the decision of Brereton J in Amirbeaggi v Business in Focus (Australia) Pty Ltd [2008] NSWSC 421 and the decision of the Court of Appeal in Tudor Developments Pty Ltd v Makeig (2008) 72 NSWLR 624; [2008] NSWCA 263. He has filed a Motion seeking orders to the effect that those alternative claims be determined separately pursuant to the Uniform Civil Procedure Rules (UCPR) rule 28.2. A number of separate questions are identified. The general form of a number of them is to ask whether the Plaintiff is barred from maintaining these proceedings or claiming interest by the relevant provisions of the Acts. Two more general questions (questions 5 and 6) are also identified. One of those asks whether any acquiescence, waiver, election or estoppel said to have occurred on the part of the Defendant relieve the Plaintiff from complying with the requirements of the 1987 Act. The other asks whether the Plaintiff is entitled to rely on principles of unjust enrichment where he would be otherwise barred from commencing or maintaining these proceedings by the provisions of the 1987 and 2004 Acts. 6 The Defendant's Motion is opposed by the Plaintiff. Originally, it was also opposed by the Second Cross Defendant. However, there was no appearance for the Second Cross Defendant at the hearing of this application and I was informed that the Second Cross Defendant neither supported nor opposed the application. 7 The application first came before James J on 19 December 2008. His Honour indicated at that time that he was not prepared to make an order for separate determination. However, His Honour stood the application over until the question of discovery and inspection had been resolved. 8 The principles which are to be applied when considering whether such an order should be made were set out by Einstein J in Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 at [7]: (1) The power of the Court to order the separate determination of an issue is a discretionary power which must be exercised judicially, but cannot otherwise be fettered: Dunstan v Simmie & Co Pty Ltd [1978] VR 699 at 670 per Young CJ and Jenkinson J.

(2) In exercising the power under Pt31, r2, the Court is now enjoined to give effect to the overriding purpose of the Supreme Court Rules; namely to facilitate the just, quick and cheap resolution of the real issues in the proceedings and cannot be stated in a more confined way: Pt1, r3 (1), r3(2) Supreme Court Rules.

(3) The Court begins with the proposition that it is ordinarily appropriate that all issues in a proceeding should be disposed of at the one time: Tallglen v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141 per Giles CJ in Comm D, Hadid v Australis Media Ltd (unreported, Supreme Court of NSW, 29 March 1996 per Rolfe J). Accordingly, it is for the party who wishes to have a question separately determined to show that it is desirable for that to occur.

(4) Without being exhaustive, the separate determination of an issue may prove to be an appropriate procedure in at least the following sets of circumstances:

(a) where the resolution of that separate issue will have the effect of resolving the entirety of the litigious controversies or of substantially narrowing the field of litigious controversy: CBS Productions Pty Ltd v O'Neil [1985] 1 NSWLR 601 at 606 per Kirby P, Dunstan v Simmie & Co Pty Ltd (supra, at 671 per Young CJ and Jenkinson J);

(b) where the resolution of that separate issue carries with it a strong prospect that the parties will thereafter be able to resolve their dispute themselves and thus avoid further litigation: Tallglen v Pay TV Holdings (supra, at 141 - 142 per Giles CJ in Comm D);

(c) where there is a clear demarcation between that issue and all other issues in the case, including issues going to the credit of witnesses: CBS Productions Pty Ltd v O'Neil (supra, at 606 per Kirby P), Tallglen v Pay TV Pty Ltd (supra, at 142 per Giles CJ in Comm D), Rajski v Carson (1988) 15 NSWLR 84 at 88 per Kirby P and Hope JA.

(5) Conversely, the separate determination of an issue will rarely be an appropriate procedure where:

(a) there are intertwined issues of fact or law between the separated question and the other questions such that the determination of the separate question will not have any substantial effect upon the width of the field of litigious controversy or the prospect of the settlement of the balance of the litigation: Law Society of NSW v Bruce (unreported, Supreme Court of NSW, 23 April 1996, per Rolfe J), Parramatta Stadium Trust v Civil and Civic Pty Ltd (unreported, Supreme Court of NSW, 27 August 1996, per Hunter J).

(b) where there is a commonality of witnesses and issues of credit as between the separate issue and other issues in the case which will or may necessitate a ruling on the credit of one or more of the common witness, thus possibly precluding that same judicial officer from again dealing with the matters going to the credit of the common witness in accordance with the decision of the Court of Appeal in Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 441: Story of Sydney Pty Ltd v Ling (unreported, Supreme Court of NSW 15 November 1994, per Rolfe J), Century Medical v THLD [2000] NSWSC 5; (unreported, Supreme Court of NSW, 3 February 2000, per Rolfe J).

(c) there is a possibility that the resolution of the separate issue will not finally determine the issue but will merely result in an appeal from that decision in relation to that separate issue, creating a multiplicity of proceedings, interruption to the court and undesirable fragmentation of the proceedings: Story of Sydney Pty Ltd v Ling (supra), Century Medical v THLD (supra). (6) The experience of courts suggests that the separation of proceedings often does not result in the quicker and cheaper resolution of proceedings as anticipated, but often has the reverse effect, merely causing added delay and expense to the resolution of the litigation. Thus, before an issue is to be separately determined, it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings: Tallglen v Pay TV Pty Ltd (supra, at 142 per Giles CJ in Comm D), Parramatta Stadium Trust v Civil and Civic Pty Ltd (supra), Century Medical v THLD (supra).

9 Einstein J's comments were in relation to Pt 31 r 2 of the Supreme Court Rules 1970 (NSW), which is not materially different from UCPR Rule 28.2.

10 The need to take care in ordering separate hearings for different issues was reinforced by the High Court in Tepko Pty Ltd and Others v Water Board (2001) 206 CLR 1. In that case Kirby and Callinan JJ said at page 55 (2001) 206 CLR 1: The attractions of trials of issues rather than of cases in their totality, are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap.

The second and related comment is this. A party whose whole case is knocked out on a trial of a preliminary or single issue, may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the court's, rather than the parties', interests.

Thirdly, there is an additional potential for further appeals to which the course of the trial on separate issues may give rise. … Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question. 11 Applying these principles, I do not think that an order for separate determination should be made. 12 In my opinion, the questions identified by the Defendant are not appropriate for separate determination. Although there may be merit in the argument that a legal practitioner should not be able to avoid the bar on legal proceedings imposed by the 1987 and 2004 Acts by relying on some form of estoppel or election or waiver or restitution, that issue cannot be determined in the abstract. There will need to be some investigation by the Court of the facts which are said to give rise to the estoppel, election, waiver or restitution in order to determine what effect the 1987 and 2004 Acts have on the claims based on those facts. It is unclear at this stage whether, as part of that investigation, one party or the other will want to cross-examine witnesses who give evidence relevant to those facts. But whether that is so or not does not matter. The Court will be required to undertake some investigation of the nature of the claims that are said to be barred. If the separate questions are answered unfavourably to the Defendant, the Court will then need to investigate the same facts to determine whether the claims of estoppel and so on are made out. That makes the issues identified by the Defendant inappropriate for separate determination.

13 In addition, it is not clear what savings would be gained in terms of court time and costs if the questions identified by the Plaintiff were determined separately. If those questions were determined adversely to the Defendant, there would be no saving in time at all. Indeed, the overall hearing time would be lengthened because, as I have indicated, there would necessarily be some overlap between the hearing on the separate questions and the hearing on the balance of the case. Even if the separate questions were determined favourably to the Defendant, they would not necessarily dispose of the whole case. It would still be necessary for the Court to determine whether the Plaintiff had complied with the requirements of the 1987 and 2004 Acts. Moreover, it is unclear how much time would be saved in those circumstances. The Defendant did not lead any evidence or point to any material from which a reasonable assessment of that question could be made. In particular, it is unclear how much additional evidence would need to be considered at trial as a result of those additional issues and how long consideration of that additional evidence would take. However, even if the time that would be saved in those circumstances is significant, I do not think that fact can outweigh the other matters I have referred to.

14 The Motion should be dismissed with costs.

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