Cabouret v Reward Insurance Pty Ltd and Matthews [2002] VCAT 1493

Victorian Civil and Administrative Tribunal|2002-12-12

The First Respondent shall pay the costs of LK Donaldson & Co of and incidental to complying with the order of the Tribunal made on 3 September 2002 including the costs of attending the hearings on 30 October and 30 November 2002, and of fulfilling the undertaking given to the Tribunal on 30 October 2002. Such costs to be paid on a solicitor/client basis. In default of agreement as to the amount of such costs by 31 January 2003 I refer the assessment or settlement of such costs to the Principal Registrar under s111 of the Act.

1. Application has been made by Mr Donaldson, solicitor, for costs arising from the Tribunal's orders for third party discovery.

2. On 3 September 2003 the Tribunal ordered that L.K. Donaldson & Co, the former solicitors for the Second and Third Respondents produce to the solicitors for the First Respondent the conveyancing file relating to the sale of the property the subject of this proceeding, by the Second and Third Respondents to the Applicant. These documents were forwarded to the Tribunal in three separate files under cover of a letter claiming legal professional privilege in relation to the documents contained in one only of those files.

3. Following a Directions Hearing on 30 October 2002, which Mr Donaldson attended in response to an order of the Tribunal made 25 October 2002, the Tribunal ordered that certain, documents in the third file or envelope, in respect of which privilege was claimed, be released to them in addition to the documents in the first two files. An order was also made directing Allens Arthur Robinson to produce to the First Respondent any files they were holding in relation to the sale of the subject property and Mr Donaldson gave an undertaking to the Tribunal to telephone the deeds clerk at Allens Arthur Robinson in an attempt to facilitate compliance with this order. He subsequently attended their offices to help locate the file.

4. Mr Donaldson is now seeking an order that the First Respondent pay his costs arising from the order made by the Tribunal on 3 September 2002 including his appearance before the Tribunal on 30 October 2002 and attending at the offices of Allens Arthur Robinson pursuant to the undertaking given to the Tribunal on 30 October 2002.

5. Mr Whitten of Counsel, on behalf of the First Respondent, submitted that there is no power within the Victorian Civil and Administrative Act 1998 to enable an order for costs to be made to a non-party. This was acknowledged by Mr Donaldson who nevertheless submitted that the Tribunal should have regard to the rules of the Supreme Court, where there is express power to order costs in favour of non-parties where third party discovery has been ordered. This approach was adopted by Deputy President Cremean in Bufalo Corporation Pty Ltd v Bulla Road Pty Ltd (26 May 2000) where at paragraph 8 he says:

"A non-party, by definition, however, is not a party. Yet there is a clear practice or procedure in the courts to the effect that a non-party should get its costs on discovery. Underlying that practice or procedure is a basic issue of fairness - someone, not a party to a proceeding, or gaining anything out of it, being drawn into it. The Tribunal, of course, is not bound by any of the practices or procedures applicable to courts of record: s98(1)(b). But it is able to adopt any of those practices or procedures. I am satisfied that the practice or procedure I have referred to is one which the Tribunal should adopt as a matter of basic fairness".

6. Although this situation is a little unusual as Mr Donaldson was previously the solicitor for the Second and Third Respondents who cannot be located, I am satisfied that the discovery ordered in such circumstances is properly regarded as third party discovery, his retainer having been withdrawn some time ago. Further, I am satisfied that Mr Donaldson being cognisant of his ethical responsibilities to his former clients, particularly in circumstances where he had received express instructions from them not to disclose their last known contact details, took the appropriate course in forwarding his files to the Tribunal. Although this was not strictly in accordance with the order made on 3 September 2002 I find it was within the spirit of that order. Further, notwithstanding my earlier finding (on 30 October) that Mr Donaldson seemed concerned to shield his former clients from any proceedings in respect to the subject property I am satisfied that this impression arises because of his concern to comply with his ethical responsibilities and to strictly adhere to his previous clients' instructions at the time his retainer was withdrawn

7. Perhaps in hindsight it would have been preferable if Mr Donaldson had requested that the matter be referred to a further directions hearing so that he could be heard in relation to his claim for privilege but even had he done so the exposure to costs by him and the First Respondent, possibly with the exception of the hearing on 25 October 2002 which was not attended by Mr Donaldson would have been the same. I note that at the Directions Hearing on 30 October 2002 other matters were also considered.

8. I accept that Mr Donaldson had a good reason for not attending on 25 October 2002 and in any event note that the Summons for Directions was addressed to the Second and Third Respondents c/- LK Donaldson & Co, and, although orders were sought in respect of the order for third party discovery made on 3 September 2002 the Summons/subsequent correspondence were not directed to L.K. Donaldson & Co. However, Mr Donaldson did attend on 30 October in response to the order of the Tribunal made on 25 October which I accept was effectively a summons to appear in respect of which, on any interpretation, he would be entitled to recover his costs in accordance with s104 of the Victorian Civil and Administrative Tribunal Act 1998.

9. Where a party seeks third party discovery they must be aware of and accept that there will be cost implications to them of obtaining access to information that would not otherwise be available to them. I am of the view that the First Respondent should pay Mr Donaldson's costs of complying with the order of 3 September and attending at both subsequent hearings - on 30 October in response to the Tribunal's order of 25 October, and at the costs hearing on 29 November_._ Further, I find that it is entirely reasonable and appropriate that the First Respondent pay his costs of attending at the offices of Allens Arthur Robinson to locate the file they were holding in relation to the subject property. Mr Donaldson gave an undertaking to the Tribunal to assist in the location of the file because he knew there was a likelihood of there being some difficulty in locating it, and in all the circumstances I am satisfied that once again the First Respondent has gained access to a file and information that may not have otherwise been available to it, but for Mr Donaldson's assistance, and he is entitled to be reimbursed his costs. Once again, although no submissions were made on this point, I am of the view that it is appropriate that such costs be paid on a solicitor/client basis having regard to the approach of the Supreme Court as adopted by Deputy President Cremean in Bufalo Corporation Pty Ltd v Bulla Road Pty Ltd (26 May 2000).

Civil and Administrative Act 1998

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Judgment (12 paragraphs)

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