Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd & Ors

Supreme Court of Victoria|2013-04-09|Before: DIXON J

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 - Directions proposed - Sections 16, 17, 21, 26 and 29 Civil Procedure Act 2010 (Vic).

1 On this matter returning for further directions on 28 March 2013, apart from procedural issues to which I shall return, oral applications were made by Clark, Toop & Taylor Lawyers (a firm) and Mr Dohrmann. The other parties were not on notice of these applications. The application by the solicitors was, essentially for summary dismissal of both the court's own motion and of the applications by summons by the first and third defendants. The application by Mr Dohrmann was for summary dismissal of the court's own motion.

2 For the reasons that follow, I propose not to rule on these applications, effectively refusing them, without denying the opportunity for like applications to later be made. I will briefly explain the substance of the applications without fully addressing the underlying facts, for reasons that will become clear.

3 The solicitors contended that there is no case for the firm to answer and it should be immediately exonerated, because an affidavit sworn by a principal of the firm, Ms Toop, fully explained the solicitors' role in the controversy over Mr Dohrmann's reports. The submission turned on the fact the firm's version of events, as deposed to in her affidavit, is not challenged and, further, is corroborated by other evidence.

4 The solicitors submit that, in respect of the first and second versions of the report dated 9 April 2010, there is no evidence that would underpin a finding of breach of an overarching obligation. Further, there is no basis to permit cross-examination of Ms Toop and the firm should not remain enmeshed in an inquiry that may carry adverse reputational consequences. In respect of the third version of the report dated 12 November 2012, the firm had nothing do with it and an odd situation arose because Mr Dohrmann, or his office, sent that version directly to the barrister and neither the barrister nor Mr Dohrmann gave a copy of it to the solicitors. The firm was unaware of the third version of the report until it came to light before the jury during evidence.

5 Further, it was contended that the defendants, who might be beneficiaries of any order made by the court under s 29 of the Civil Procedure Act 2010, have not been prejudiced. Rather, they were presented with a forensic advantage that was seized upon and exploited by them, resulting in a verdict in their favour, with costs against the plaintiff. There is no connection established between any breach and any damage.

6 Mr Dohrmann invited the court to be satisfied that, in compliance with its directions, he has given a fulsome explanation of the controversy before the court and that the court ought to draw a line under its own inquiry and leave the field to those who would agitate for their own interests to obtain compensation. Each of the first and third defendants has an extant summons seeking orders under s 29, while the second defendant appears to assist the court acting on its own motion. The court was invited simply to accept that Mr Dohrmann complied with the court's orders and nothing further is required. Further, as the court has required Mr Dohrmann and the solicitors to put on affidavits, the parties are now appropriately informed to allow a judgment about whether to pursue the matter in their own interests.

7 Mr Dohrmann contended that there are problems with an inquiry by the court running concurrently with applications by the parties, because it creates a 'management issue'. Pressed to explain this submission, his counsel suggested that the court is both driving the process and simultaneously adjudicating on an inter partes application, which raises an apprehension of bias. However, Mr Dohrmann neither developed nor pressed an application in this regard. At best it was foreshadowed as a potential issue and counsel submitted that his key point was that, having received an explanation from Mr Dohrmann in compliance with the court's directions, the court can now conclude its inquiry into compliance by Mr Dohrmann with the obligations that are imposed on him.

8 Mr Dohrmann renewed his submission that the parties seeking a benefit, that is the defendants, should state by a statement of claim or equivalent what it is that they say Mr Dohrmann has done wrong and exactly how they say that gives rise to a liability to them and what for, particularly in connection with the suggested breach of s 17, the requirement to act honestly.

9 I am not persuaded to accept either application at this stage. The applications were not made on notice. Each application necessarily involves making findings of fact and it is premature to do that. Firstly, the defendants propose putting on further affidavits. I did not permit the challenge thrown out by counsel for the solicitors that the precise scope of any challenge to the affidavit of Ms Toop be immediately spelt out. I propose to permit further affidavits in reply. At present, it may be contended that there is no reason for the court to permit cross-examination of Ms Toop on her affidavit because there is not any contradicting material, but the proper scope for any cross examination on affidavits will be determined at the hearing. The defendants stated that they each propose to contest aspects of the matters described by Ms Toop. In any event, subject to rules of procedural fairness, parties are entitled to challenge matters deposed to in an affidavit, by cross-examination, without necessarily advancing alternative facts.

10 Further, it ought to be borne in mind that the explanation of these events that is now advanced by the solicitors was not advanced before the jury and, if it is the recently advanced versions of events that should be accepted, the reasons why the recent version was not put to the jury may be directly relevant to the issue of breach of obligations to the court. The court is concerned with the due observance of obligations during the proceeding. It is no response to that concern to rely, as Mr Dohrmann does, on the fact of compliance with directions to put on an affidavit.

11 As further affidavits are to be filed and it appears that existing explanations about the controversy may be elucidated by cross-examination, it is inappropriate to presently make any findings of fact. In addition, the defendants were not on notice of the applications and did not respond with submissions as to the proper findings of fact to be made in order to determine either the solicitor's application or Mr Dohrmann's application.

12 These applications, as secondary or subsidiary arguments, also refer to questions of damages or compensation and may raise issues that require further submission and argument. 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.

13 Primarily, the court is contemplating whether its discretion as to costs would be enlivened should a finding of breach of any overarching obligation be open. Loss and damage has not been alleged by any party. Moreover, the persons whose interests may have been prejudicially affected by possible contravention of overarching obligations are not limited to the defendants.

14 Two further observations can be made about Mr Dohrmann's application, I have already rejected the contention that the court should defer making orders of its own motion should a party seek orders by summons in my ruling on 4 February 2013.[1] Mr Dohrmann added that although the court has seen something that required explanation, the court now has that explanation. On its face, the process has run its course unless the court considers that more is required.

15 I do not consider that the process has run its course. It remains at the stage where the court is seeking a full explanation of the circumstances. That may require further affidavits and/or cross-examination of deponents. No factual findings have been made and only the solicitors, in the context of their summary dismissal application, have made any submission about factual findings.

16 What I said on the previous occasion about the procedure to be adopted for the resolution of the matter remains apposite. For clarification, I would add that the issue of whether there has been any breach of s 17 of the Civil Procedure Act is limited to the circumstances of the date of the third version of the report.[2]

17 As I have observed, a divergence is evident between the explanation that the jury heard of the circumstances of this controversy and explanations that are now advanced by affidavit. That has come about, in part, because senior counsel for the plaintiff, has provided his explanation of events by an affidavit. As counsel for the solicitors put it, an odd situation arose, as the solicitors were the instructing party. Counsel's role in the controversy now appears more significant, and he is now represented. The issue that arises is whether the circumstances of direct dealing with the third version of the report between counsel and Mr Dohrmann, that is, other than through the instructing solicitors, may have involved breaches, in the conduct of the trial, of s 21 and s 26 of the Act and Order 44 by counsel, which initially appeared to have arisen out of conduct of the solicitors. As the circumstances have now evolved, particularly having regard to the explanations so far provided, it appears that senior counsel for the plaintiff may have been more involved than the solicitors in the controversy that is the subject of the court's motion. The role of junior counsel, if any, has not been alluded to in the affidavits filed to date.

18 I will give directions that I require that Mr Richards and Mr Ingram attend to be heard about whether the court might find any breach of obligations to the court and ought to consider whether any order under s 29(1) of the Act should now be made in the interests of justice. In this respect, the observations that I made following the last directions hearing remain apposite.[3] It is necessary for the parties who have issued summonses to determine whether they wish to amend their summonses accordingly.

19 I will make the following directions, in part pursuant to ss 48 and 49 of the Act.

(a) I direct that John Bennett Richards SC and Andrew D.B. Ingram attend before the court on 20 May 2013 on the hearing and determination of whether the court ought of its own motion make any order under s 29(1) of the Civil Procedure Act 2010 against them or either of them.

(b) I direct that the first defendant, by its solicitors, serve a copy of this order, the order made on 4 February 2013, my reasons delivered this day and my reasons delivered on 4 February 2013 on John Bennett Richards SC and Andrew D.B. Ingram.

(d) Provided that the deponent of each affidavit that has been filed and served is available at the hearing for cross-examination should leave be granted, evidence on the application shall be by affidavit.

(e) Any affidavit or further affidavit by, or on behalf of, Clark, Toop & Taylor Lawyers (a firm), Mr Dohrmann, Mr Richards, or Mr Ingram shall be filed and served by 6 May 2013.

(f) Any further or reply affidavit on behalf of any party to the proceeding shall be filed and served by 22 April 2013.

(g) Deponents of affidavits may not be cross-examined without leave.

(h) Each deponent of each affidavit that has been filed and served shall have in his or her possession on the hearing of the applications, to produce to the court if called for, all original documents in his or her possession falling within the categories identified in r 29.08(3) of the Supreme Court (General Civil Procedure) Rules 2005 and relevant to the issues identified in the affidavits filed and served, including documents in electronic formats.

(i) The applications are fixed for hearing on 20 May 2013.

(j) I will reserve the costs of the directions hearing.

[1] Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd & Ors (No. 4) [2013] VSC 14.

Court (General Civil Procedure) Rules 2005

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