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[2013] VSC 14
Supreme Court of Victoria
2013-02-04
DIXON J
Original judgment source is linked above.
PRACTICE AND PROCEDURE - Overarching obligations - Issue arising of whether breach of overarching obligations by expert witness and by solicitors instructing that expert has occurred - Where court proposes to make orders on its own motion - Nature of inquiry to be conducted - Directions proposed - Sections 16, 17, 21, 26 and 29 Civil Procedure Act 2010 (Vic).
1 On 12 December 2012 following a trial that commenced on 13 November 2012 and the verdict of a jury of six, I entered judgment for the defendants in this proceeding.
2 When pronouncing judgment, I noted in 'Other Matters', amongst other things, that:
3 Clark, Toop & Taylor and Mr Mark Dohrmann each appeared today, represented by counsel. The first defendant has filed a summons seeking relief pursuant to my direction but to date no application has been made by any other party. The issue to be decided is the directions that I ought now give to determine the material on which the court should decide whether it is satisfied that any order should now be made in the interests of justice.
4 Sections 28 and 29 of the Civil Procedure Act 2010 provide that a court may take into account any contravention of an overarching obligation in exercising any power in relation to a civil proceeding including exercising its discretion as to costs. The court may make any order it considers appropriate in the interests of justice if the court is satisfied that, on the balance of probabilities, a person has contravened any overarching obligation. Such orders may include orders that the contravening person pay costs or expenses, or pay compensation, or any other order that the court considers to be in the interests of any person who has been prejudicially affected by the contravention of the overarching obligations.
5 This statutory jurisdiction has, I think, its origins in the ability of the courts to enforce duties owed by practitioners to the court[1] in conjunction with the jurisdiction to award costs against persons who are not parties to the proceeding.[2] That jurisdiction is compensatory, not punitive.[3] This is not to deny that where the jurisdiction is enlivened by a finding of a contravention of an obligation to the court there is a punitive, and a deterrent, slant that distinguishes the jurisdiction from the usual costs discretion. An order will ordinarily be limited to costs or expenses that were caused by the contravention of an obligation to the court. Section 29 may be in wider terms than the costs jurisdiction against lawyers personally at common law. Compensation may be awarded and orders other than for financial payments may be made. That is a matter for another time.
6 An order under s 29 of the Act may be made on the court's own motion, and that basis for this application has been enlivened. To date, the only application by a party to the proceeding, that filed on behalf of the first defendant, is yet to specify how it contends that Mr Dohrmann or the plaintiff's solicitors have contravened any overarching obligation, what order it considers the court ought to make as appropriate in the interests of justice and whether, how, and to what extent, it has been prejudicially affected by any contravention of overarching obligations.
7 The language of the provisions affirms the view that the jurisdiction is compensatory, not punitive. Although s 29 of the Act speaks of 'contravention' there is nothing in the legislation to suggest that the court's response involves the application of a sanction or other punitive measure. The precise characterisation of the orders that might be made under s 29 is a matter for a later time, but in my view the court's motion does not presently warrant comprehensive articulation of alleged contraventions, as contended for by Mr Dohrmann and Clark, Toop & Taylor, before they ought to explain the relevant circumstances. That approach is not consistent with the paramount duty owed to the court under s 16 of the Act or the duties more generally owed to the court. Further, s 20 of the Act provides that a person to whom the overarching obligations apply must cooperate with the court in connection with the conduct of the proceeding.
8 Because the trial was conducted before a jury, there was no opportunity to inquire properly into questions about discharge of duties to the court when Mr Dohrmann gave evidence. Neither was their evidence of the consequences for any party to the proceeding arising from the events of the third version of Mr Dohrmann's report.
9 Presently, the first defendant's summons is not supported by an affidavit, but counsel foreshadowed that the first defendant will likely seek an order pursuant to s 29(1)(a) for payment of some or all of the legal costs or other costs or expenses of the first defendant arising from a contravention, if established. The second defendant foreshadowed that it is likely to make a similar application, while the position of the third defendant, who settled with all parties during the trial on terms that were not disclosed to the court, requires further clarification. The plaintiff was not represented and counsel appearing for Clark, Toop & Taylor was not in a position to inform me whether the plaintiff was aware of the terms of these recitals and directions in the Court's judgment. Counsel who appeared for Clark, Toop & Taylor undertook to me to arrange for his client (who presumably is his instructing solicitor) to inform the plaintiff of my directions and of her right to obtain independent legal advice about making an application, or support the court's motion. Clark, Toop & Taylor should also provide Mrs Hudspeth with a copy of this ruling and my directions given this day.
10 Mr Dohrmann and Clark, Toop & Taylor opposed the suggestion that they now be directed to put on affidavits deposing to the material circumstances referred to in recital C of "Other Matters' in the judgment. Mr Dohrmann and Clark, Toop & Taylor contend that they ought not be required to explain any aspect of the circumstances under inquiry until particulars are provided that identify the material substance of each contravention, the obligation contravened including its legal basis, the costs, expenses, or loss that has been suffered and the causal relationship between contravention and loss.
11 Mr Dohrmann and Clark, Toop & Taylor submitted that on this motion they face the prospect of a sanction, possibly in the nature of a penalty, and that prospect tempers the procedure that must be adopted. First, they contended that they do not know precisely what it is that is complained about. Second, the parties to the proceeding appeared to be declining to commit to either specific allegations of contravention of an overarching obligation, or to a loss that arises from or was materially contributed to by that contravention. Mr Dohrmann and Clark, Toop & Taylor further submitted that while the court's motion is not a criminal complaint its not entirely a civil proceeding either, and is in some ways not dissimilar to a civil penalty proceeding. Such a submission would, apparently, be developed out of the consequences that may follow, including financial and reputational consequences, for them should a contravention be established. For that reason, where there are parties whose interests, they say, are directly affected by the conduct and who would wish to claim relief in relation to that conduct, that those parties ought to agitate the matter. In this sense, the issues raised are adversarial, not inquisitorial. It was further submitted that the court should be hesitant to act on its own motion, where there are well resourced, competently represented, parties in the proceeding, doing so being in the nature of a reserve power.
12 The second defendant emphasised that s 16 of the Civil Procedure Act 2010 states that each person to whom the overarching obligations apply has a paramount duty to the court to further the administration of justice in relation to any civil proceeding. Thus, it contended, the overarching obligations are obligations owed primarily to the court and not duties owed to the parties to the litigation who may have been affected by the breach. As a question of the court's supervision of those who owe obligations to it, here a solicitor and an expert witness, it is appropriate for the parties to defer to the court's motion. Another reason was that putting on a summons exposed the second defendant to an order for costs when different dynamics might apply should the second defendant confine itself to responding to the court's own motion.
13 Notwithstanding these submissions, counsel for the second defendant suggested that there may have been costs unnecessarily incurred following particularly on the earlier (April 2010) versions of Mr Dohrmann's report which might arise from contravention of an overarching obligation. Counsel suggested that had the reference to the plaintiff not having previously seen evidence of vandalism of soap dispensers been corrected in April or May 2010, the structure of the parties to the proceeding and the course of the proceeding prior to and at the trial may have been different.
14 Although there are proper aspects to each of these submissions, I do not accept that either identifies the appropriate course to be taken. The language of the Act does not characterise the consequences of orders made under s 29 of the Act pursuant to the court's motion as involving sanctions or civil penalties, and I have noted, has probably derived from a jurisdiction regarded as compensatory.
15 The main purposes of the Civil Procedure Act, as articulated by the legislature in s 1, include reforming and modernising the laws, practice, procedure and processes relating to the resolution of civil disputes which may lead to civil proceedings and to provide for overarching obligations for participants in civil proceedings to improve standards of conduct in litigation. The overarching purpose in relation to the conduct of civil proceedings is to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute. That overarching purpose applies to all forms of appropriate dispute resolution. The intention of the legislature is precisely that the court be more pro-active in achieving that purpose. In any event, the inherent jurisdiction of the court over its officers and processes is not in doubt.
16 I reject Mr Dohrmann's submission that the court should be hesitant to act on its own motion where it is open to a party to the civil proceeding to move for appropriate relief. The terms of s 29(2) of the Civil Procedure Act 2010 are unambiguous and do not suggest that the court's motion is a backstop or reserve procedure. Having regard to the broad facilitative language of the sub-section and the legislature's expressed purposes for its enactment there is no warrant for the limitation contended for.[4]
17 On the other hand, although the motion directs an inquiry into performance of the paramount duty to the court to further the administration of justice and the court has wide powers that can be exercised on being satisfied that a person has contravened an overarching obligation, it is desirable that the other parties identify whether, and to what extent costs expenses or financial loss arises from or has been materially contributed to by a possible contravention of an overarching obligation before the court proceeds of its own motion.
18 A court must seek to give effect to the overarching purpose in exercising its powers, which includes the objects identified in s 9 of the Act. Proper identification of the remedy, for which any party to the proceeding contends, affords an opportunity for resolution of disputes by agreement. It is a basic feature of litigation that the entitlement to pursue the benefit of a remedy properly carries a risk of costs. Although the court is able, if it be a proper exercise of discretion to do so, to order costs against a party unsuccessfully seeking the benefit of a remedy without having made a formal application, it will usually be preferable for such procedural issues to be confronted and resolved. Because the nature of the orders that may be made by the court under s 29 of the Act is not limited to monetary loss in the form of costs, expenses or financial loss, the absence of a claim to such a loss by a party to the proceeding, or the compromise of a claim by a party to such a loss, may not preclude the court's inquiry on its own motion. Except to the extent that these considerations require a direction that the parties to the proceeding put on a summons and affidavit if they contend that they are entitled to the benefit of an order in their favour under s 29 of the Act, they are matters for another day.
19 For these reasons I will require that any party to the proceeding contending for an order under s 29(1) of the Act in her or its favour, file and serve any application and affidavit in support by 22 February 2013.
20 Returning to the question of directions that Mr Dohrmann and Clark, Toop & Taylor explain the material circumstances surrounding the third version of Mr Dohrmann's report, I do not accept that those circumstances are not evident on reading the evidentiary material identified in 'Other Matters' in the judgment. I do not accept the submission that Mr Dohrmann and Clark, Toop & Taylor should not be required to explain the circumstances surrounding the third version of Mr Dohrmann's report until 'full particulars of the contraventions' are provided. Had the proceeding been a cause, I may well have questioned Mr Dohrmann and the plaintiff's counsel directly about those circumstances. It was not appropriate to conduct or complete such an inquiry before a jury. What the court now seeks is an explanation from non-parties who either are, or stand in an analogous position to, its officers of conduct that appears to have caused additional or wasted costs, possibly as a result of the conduct and outcome in the trial, and of the loss of possible opportunities to compromise the proceeding. The court is yet to consider the precise form of alleged contraventions of overarching obligations that require a response.
21 I consider that the court is entitled to a full and proper explanation of the circumstances surrounding the third version of Mr Dohrmann's report from Clark, Toop & Taylor because solicitors are officers of the court subject to the highest duty of fidelity to the court, a duty not merely preserved,[5] but reinforced, by Part 2.2 of the Act. Expert witnesses, many of whom like solicitors make their living in the courts, are in an analogous position, arising from, inter alia, the precondition for admissibility of expert opinion that Rule 44.03 be complied with. Expert witnesses must acknowledge an overriding duty to assist the court impartially.[6] This duty, too, is preserved and restated by the application of the overarching obligations to expert witnesses by s 10(3) of the Act.
22 The nature of these duties is such that the court need not be reticent in requiring a full and frank account of the circumstances surrounding the preparation of expert opinion that is given in evidence in a proceeding. There is an overarching obligation on solicitors and expert witnesses to cooperate with the court in connection with the conduct of a civil proceeding.[7] Plainly, the court's inquiry is resolved if it receives a satisfactory explanation of the matters of concern. This does not involve an open-ended inquiry.
23 In my view it is appropriate to require Mr Dohrmann and Clark, Toop & Taylor to positively depose to the circumstances that they contend demonstrate compliance with their paramount duty to the court, particularly the overarching obligations arising under ss 17 and 21 and additionally for the solicitors s 26 of the Act, the rules of civil procedure, particularly r 44.03(3), and the expert witness code of conduct. Except to the extent that I have explained, I do not accept the submission from Mr Dohrmann that the other parties should first provide details of particulars resembling informations or indictments in a form used in criminal matters before he is called upon to respond.
24 I am assisted by observations made in the Appeal Division of this court in Shire of Gisborne v King,[8] which concerned an application for leave to appeal against the decision of a judge declining to give particulars in respect of a contemplated order that a costs order be made in favour of a plaintiff against a barrister. That decision turns, in part, on different statutory language.[9] The importance of ensuring that the barrister in that case had full and sufficient notice of what is the complaint made and a full and sufficient opportunity to answer it, is noted.
25 The present requirements for procedural fairness can be met if I explain the aspects of the evidence that was before the jury as the tribunal of fact that, if unanswered, might enable findings to be made on that evidence that an overarching obligation was contravened. Not sitting as the tribunal of fact, I have not made findings and, at this stage, seek explanations not from persons 'accused' but from persons owing high and important duties to the court. The basis for my ruling that I would not discharge the jury by reason of comment by counsel for the second defendant to the jury in final address has not involved any adverse finding on my part in respect of Mr Dohrmann and Clark, Toop & Taylor. In addition, I will direct that the parties to the proceeding who support the motion file affidavits first.
26 Thereafter, once all participants have explained what occurred, the court will be in a position to give notice of the type of order being contemplated and the relevant aspects of the conduct of Mr Dohrmann and Clark, Toop & Taylor that might constitute a contravention of an overarching obligation. If further clarification then be needed, the court can then inform Mr Dohrmann and Clark, Toop & Taylor of the grounds on which it appears to the Court that costs have been incurred or wasted arising from a contravention of an overarching obligation.[10] In the circumstances of this proceeding, it is at this next stage that the guidance afforded by Shire of Gisborne v King becomes important.
27 During the trial there was evidence before the jury that:
(a) Mr Dohrmann was retained to provide an expert report. Mr Dohrmann is a professional consulting engineer with qualifications in mechanical engineering and ergonomics who professes to have expertise in the field of occupational health and safety.
(b) On instructions from Clark, Toop & Taylor, he produced a report(s) dated 9 April 2010 that was served on other parties pursuant to Order 44 and he gave evidence for the plaintiff before the jury of the opinions expressed in that report.
(c) It became clear during the trial that there were three versions of this report. Two versions were dated 9 April 2010 and the difference between them was that in one version (the first version) Mr Dohrmann assumed that the plaintiff had previously seen evidence of vandalism or missing soap dispensers and had reported such sightings to her supervisors. The other version (the second version) assumed that the plaintiff had not previously seen evidence of vandalism or missing soap dispensers. The third version of the report bears the date 12 November 2012 and it recounts assumptions of fact that are materially different from the April 2010 versions of the report, although the opinions expressed remain unchanged. In relation to the issue of prior evidence of vandalism, this latest version is in the same terms as the first version.
(d) Unexplained, the evidence at trial could support a finding that the third version of the report was written after 15 November 2012 and may have been backdated.
(e) There was evidence that Mr Dohrmann adopted the third version of the report as true and correct and sent it to his instructing solicitors Clark, Toop & Taylor.
(f) The third version of the report materially altered the sequence of events stated as the assumptions of fact upon which like opinions were expressed by Mr Dohrmann.
(g) By 15 November 2012, the plaintiff had been extensively cross-examined by counsel for the defendants about inconsistencies between her evidence of events and the assumptions recorded by Mr Dohrmann in the April 2010 versions of his report.
(h) The existence of the third version of the report was not revealed to the court until it was exposed in cross-examination. When giving his evidence in chief, Mr Dohrmann was initially invited to express opinions on the basis that the jury accept the evidence that had been given by the plaintiff. On objection by the defendants, Mr Dohrmann continued his evidence on the basis stated in the April 2010 reports.
(i) While a number of aspects of the preparation of the reports by Mr Dohrmann and their disclosure by the plaintiff's solicitors were explored in cross-examination before the jury, that cross-examination was not focussed on establishing whether there was a contravention of an overarching obligation under the Civil Procedure Act 2010 or contravention of any broader obligation, independent of the terms of the Civil Procedure Act 2010, that is owed to the court by Mr Dohrmann and the plaintiff's solicitors.
(j) At trial, counsel for the plaintiff did not take the opportunity that was available, as they were yet to close their case, to respond with further or other evidence about the matters that were put to Mr Dohrmann in cross-examination.
28 A further issue arose when counsel for Mr Dohrmann, enquiring why the report was said to be backdated, informed the court that an email communication demonstrated that Mr Dohrmann sent the third version of the report to counsel for the plaintiff directly on 12 November, 2012. A clean copy of the email, which I sighted, was not then available to be marked for identification.
29 These are the matters which, unexplained, may be prima facie grounds on which the court might be satisfied that there has been a failure to properly discharge obligations owed by Mr Dohrmann and by the plaintiff's solicitors to the court. Although the versions of Mr Dohrmann's report dated April 2010 precede the coming into operation of the Civil Procedure Act 2010, the preparation of the third version of the report and the conduct of the trial have occurred since that Act came into force. Further, there may arise a question whether the duties and obligations that are set out in Part 2.3 of the Civil Procedure Act 2010 and the court's powers under Part 2.4 of the Act were otherwise within the practices and jurisdiction of the court prior to its enactment.
30 Presently the inquiry is directed to the circumstances surrounding the third version of Mr Dohrmann's report. Although the circumstances surrounding the preparation of the first and second versions of the report relevantly inform the circumstances of the preparation of the third version of the report, unless the matter is raised by a party to the proceeding I propose to confine the inquiry being made on the court's own motion within the parameters originally outlined and set out above.
31 In summary, the matters on which the court seeks an explanation are these:
(a) What were the circumstances that resulted in the preparation of the third version of the report?
(b) When did those circumstances arise and when was the third version of the report prepared? Was the third version of the report backdated and if so, why? If the report was backdated without good cause, an inference of a want of honesty may be open.
(c) Why did the solicitors for the plaintiff not disclose the existence of the third report to the other parties?
(d) Why did the solicitors for the plaintiff not disclose the existence of the third version of the report to the court while attempting to lead evidence consistent with it?
(e) Why did the solicitors for the plaintiff not clarify with the court and the other parties the mistaken belief that the report of 9 April 2010 was the only expert report from Mr Dohrmann?
(f) Why did Mr Dohrmann not disclose the third version of the report to the court when giving his evidence? Was there compliance with the Expert Witness Code of Conduct in those circumstances?
(g) What was the form and terms of any agreement reached between Mr Dohrmann and the solicitors for the plaintiff for payment of his fee and were such circumstances relevant to the assessment of whether he was impartial and not advocating for the plaintiff?
32 I was informed by Mr Worth of counsel that Ms Patricia Toop is the principal of Clark, Toop & Taylor with responsibility for the plaintiff's proceeding and on that basis I will direct that by 22 March 2013 Patricia Toop make, file and serve an affidavit that identifies, both from personal knowledge and on information and belief, after making all due and proper inquiries, the material facts, occurring on or after 9 April 2010, in connection with the instructions for and use of the expert's reports obtained from Mr Dohrmann. I will also direct that by the same date Mark Dohrmann make, file and serve an affidavit that identifies both from personal knowledge and on information and belief after making all due and proper inquiries the material facts in connection with the instructions that he received for the preparation of the third version of his report that resulted in the version of the report bearing the date 12 November 2012.
33 The material facts to which those affidavits ought to be directed will include:
(a) the content of communications that took place after the trial commenced on 13 November 2012 between legal representatives for the plaintiff and Mr Dohrmann about the assumed facts stated and the opinions expressed by Mr Dohrmann in his reports dated 9 April 2010;
(b) any instructions to Mr Dohrmann after service on the other parties of his report, for the preparation of a further or amended report and the circumstances in which such instructions were communicated;
(c) the circumstances of the provision by Mr Dohrmann to Clark, Toop & Taylor of each of the versions of the report dated 9 April 2010 and the version of the report bearing the date 12 November 2012;
(d) the significance, if any, for Mr Dohrmann of any document, information or further instructions provided to him after his April 2010 versions and before the third version of his report;
(d) any explanation by the plaintiff's solicitors for the failure to inform the court of the existence of the version of the report bearing the date 12 November 2012 and any explanation by Mr Dohrmann for his failure to inform the court, when giving evidence, of the existence of the version of the report bearing the date 12 November 2012;
(e) the basis upon which Mr Dohrmann contends that he properly declares in respect of the version of the report bearing the date 12 November 2012 the matters specified in clauses 3(d) and 3(h) of the expert witness code of conduct;
(f) the form and terms of any agreement reached with Clark, Toop & Taylor for the payment of Mr Dohrmann's fee.
34 I will reserve the costs of the directions hearing.
[1] Myers v Elman [1940] AC 282; Grassby v R [1989] HCA 45; (1989) 168 CLR 1 at 16-17; Knight v SP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178 at 188.
[2] Knight v SP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178 at 185, 190, 192, 202.
[3] Myers v Elman [1940] AC 282 at 289, 319 (but note Lord Atkin at 303). The judgments are not consistent but in subsequent cases proceed on the basis that the jurisdiction is compensatory. See the discussion by Goldberg J in White Industries (Qld) Pty Ltd v Flower & Hart (a firm) [1998] FCA 806; (1998) 156 ALR 169 at 229-231, affirmed in Flower & Hart (a firm) v White Industries (Qld) Pty Ltd [1999] FCA 773; 87 FCR 134, and by Batt JA in Etna v Arif [1999] VSCA 99; [1999] 2 VR 353 at 379.
[4] see also Reid v Hubbard (No 2) [2004] FCA 180.
[6] see Stanton v Callaghan [2000] 1 QB 75 at 108.
[9] compare r 63.23(3) of the Supreme Court (General Civil Procedure) Rules 2005.
[10] see also Reid v Hubbard (No 2) [2004] FCA 180.
Hudspeth
Scholastic Cleaning and Consultancy Services Pty Ltd & Ors
(1989) 168 CLR 1
(1992) 174 CLR 178
(1998) 156 ALR 169