Kalil v Eppinga

District Court of NSW|2019-09-05

Young v Hughes Trueman Pty Ltd [2016] FCA 1176 Young v Hughes Trueman Pty Ltd (No 4) [2017] FCA 456 Young v Hughes Trueman Pty Ltd [2016] FCCA 989 Muriniti v King; Newell v Hemmings [2019] NSWCA 232 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 Cultus Petroleum v OMV Australia [1999] NSWSC 435 Seller v Jones [2014] NSWCA 19 Zarth v Williamson & Ors [2006] NSWCA 246 Young v Hughes Trueman [2016] FCCA 989 Category: Costs Parties: Mahmoud Kalil (Plaintiff) Ellie Rose Eppinga (Defendant) Representation: Counsel: N/A

Solicitors: L.C Muriniti & Associates (Defendants) Goldsmiths Lawyers (Plaintiff) File Number(s): 2019/45573 Publication restriction: Nil

Evidence Relied On

The Plaintiffs relied on the following evidence: 1. the affidavit of Kaitie Andrews, affirmed on 6 August 2019; 2. three affidavits of Barry Goldsmith, affirmed on 20 September 2019, 9 October 2019 and 20 November 2019 respectively. Mr Goldsmith was cross-examined; 3. affidavits of Ella MacKintosh affirmed on 16 March 2019 and 19 March 2019 respectively; 4. a Notice to Produce dated 6 November 2019; and 5. documents relating to the application for costs.
The Defendants relied on: 1. two affidavits from Mr Muriniti sworn 30th of October and 14 November 2019 respectively. Mr Muriniti was cross-examined; and 2. documents relating to the application for costs.

Legal Principles Regarding the Making of as Personal Costs Order and the Basis of the Application

Section 98 of the Civil Procedure Act 2005 ("CPA") invests the Court with power to determine by whom, to whom and to what extent costs are to be paid. That power must be considered in the context of s 56 of the CPA, which requires the Court to give effect to the overriding purpose - the facilitation of the just, quick and cheap resolution of the real issues in the proceedings - when exercising the power in, or interpreting, s 99 of the CPA.
Mr Newell and Mr Muriniti are under a duty to assist in furthering the overriding purpose, and a failure to do so may be taken into account by the Court in exercising any discretion under s 99 of the CPA in respect of costs. I have done so in this case.
Section 99 of the CPA provides that, if it appears to the Court that costs have been incurred "by the serious neglect, serious incompetence or serious misconduct of a legal practitioner" or "improperly, or without reasonable cause", in circumstances for which a legal practitioner is responsible, the Court may order the legal practitioner to pay the costs incurred. The legal practitioner is not entitled to demand, recover or accept from the client, any part of the amount that the legal practitioner is directed by the Court to pay.
Mr Goldsmith relied on a decision of Taylor SC DCJ in this Court of De Costi Seafoods (Franchises) Pty Limited and Anor v Wachtenheim and Anor (No 6) [2016] NSWDC 378. Not unlike this case, the underlying claim was not especially unusual or complicated. In the circumstances of that case, his Honour took the view that, "without explanation, three versions of a pleaded claim, the original and two amendments, might be excused. Perhaps the presence of another two amendments should be disregarded before the negligence or incompetence can be regarded as serious. But, in my view, the service of 16 versions of the pleading, whether filed or not, is grossly excessive if unexplained. It raises the possibility that the costs thrown away or occasioned by the amendments reflected in the fifth further amended statement of cross-claim and subsequent versions should be borne by the legal practitioners."
Mr Muriniti explained in that case, as Mr Newell does in this case, that, "Not every amendment of a pleading is caused by the neglect, incompetence or misconduct of a practitioner". I agree. What is required is to examine the conduct of the legal practitioners overall and decide to what extent any or all of the costs occasioned arose by reason of the serious negligence or incompetence, or was attended with misconduct, or were occasioned improperly or without reasonable cause.
No real explanation has been provided in this case justifying the various versions of the pleading. Indeed Mr Newell and Mr Muriniti have studiously avoided informing the Court as to the background behind any of the amendments, relying on the Defendants' claim for privilege over that issue, and complaining that they were responding to the (at times unreasonable) objections put against them on behalf of the Plaintiffs.
I have therefore had recourse to: the conduct and attitude that Mr Newell and Mr Muriniti have exhibited in the proceedings (and as informed by unrelated cases); their conduct during the hearing of the motion; the detail of the various amendments and the responses to the objections in the various iterations of the Amended Defences, together with what has been identified in various timesheets.

The Basis of This Application

In point form, the Plaintiffs' position is that Mr Muriniti and Mr Newell both exhibited serious incompetence, based on the following: 1. Neither Mr Muriniti nor Mr Newell has any experience in conducting Defamation cases; 2. Notwithstanding that, both have persevered in providing inadequate Amended Defences, despite "endless" education by the Court as to how to plead matters; 3. Fundamental, wholesale and basic deficiencies were exhibited, for example to plead the facts. Such deficiencies were as a result of a demonstrated lack of knowledge and experience on the part of Mr Muriniti and Mr Newell; 4. Mr Muriniti persevered in engaging Mr Newell against very clear evidence that Mr Newell does not know how to address in a proper way a Defamation case; and where 5. Such perseverance was, from the Plaintiffs' perspective, expensive, time consuming, and frustrating, against a background where both Mr Muriniti and Mr Newell, have engaged in conduct that is substantially the same as that which has led to the making of personal cost orders against them in the past, showing a tendency to expend costs without due regard to any obligation to the Court or to their opponent, and in breach of s 56 of the CPA.
In response, Mr Newell submitted that serious incompetence cannot be established simply by pointing to four attempts at a pleading and complaints within the various drafts. He said that it was a much higher benchmark standard that called for serious incompetence and that no cases have been put forward of a comparable nature to this one to found the application.

Mr Newell's Alleged Past Incompetence and Mr Muriniti's Support of Him

Mr Muriniti has been associated with Mr Newell for about 15 years. He briefed Mr Newell regularly as a barrister over a period of nearly a decade.
In mid-2014 all relevant professional indemnity insurers refused to reinsure Mr Newell as a barrister. The refusal was said by Mr Muriniti to have arisen out of the De Costi litigation (to which I will return), and the resulting costs orders that had been made against him. The costs orders were made against both Mr Muriniti and Mr Newell in respect of that litigation. At that time Mr Newell ceased to be a barrister and commenced work as Mr Muriniti's employed solicitor.
Mr Muriniti accepted that refusing to provide professional indemnity insurance to a legal practitioner is a serious matter but he remains of the view that Mr Newell's insurance was unfairly declined and he was prepared to employ him. He said that he did not think that Mr Newell had done anything inappropriate to have the insurance declined.
Mr Muriniti did not agree with findings of various Courts that: he and Mr Newell had behaved incompetently, unprofessionally, inappropriately and against the true interest of their client; or that costs had been incurred by serious incompetence and serious neglect on his part and on the part of Mr Newell.
Mr Muriniti has only once prior to this matter briefed Mr Newell in a Defamation case. Mr Muriniti said that he could not recall the name of the matter, but said that it went to trial before Gibson DCJ. Mr Newell later confirmed that the case was Zarth v Williamson & Ors. In that matter Mr Muriniti's clients failed in the District Court and in the Court of Appeal (see [2006] NSWCA 246). There were no personal costs orders made against either of them in that case and I have drawn no adverse inference against either Mr Newell or Mr Muriniti by reason of their failure in that case.

The Current Arrangement Between Mr Muriniti and Mr Newell

According to Mr Muriniti, the nature of the work relationship is as follows: Mr Muriniti practices from offices in the Northern Beaches area. Mr Newell works full time for the firm, but from his own home. \Mr Newell is remunerated depending on the number of hours worked. Mr Muriniti explained that Mr Newell records his hours on a timesheet and at the appropriate time (usually at the end of the matter) bills Mr Muriniti for his time. Depending on the arrangement with the particular client, if the matter is not successfully concluded Mr Newell might not be paid.
In this case Mr Muriniti initially said that Mr Newell "would" be remunerated at the conclusion of the proceedings. When pressed, he changed his answer to "might". This evidence arose perhaps in the context of Mr Muriniti's concern about inadvertently waiving his clients' legal professional privilege. However, the appropriate course would simply have been for Mr Muriniti or Mr Newell to object to Mr Muriniti answering the question as it raised matters of privilege (which he belatedly did), rather than give inconsistent answers. Those inconsistent answers have negatively impacted upon my willingness to accept Mr Muriniti as an honest and reliable witness.
Mr Newell has always held a supervised practising certificate whilst working for Mr Muriniti. Mr Muriniti explained that this was so despite Mr Newell's lengthy legal experience, and that this was because Mr Newell is an employed solicitor. Importantly, Mr Muriniti accepted that this resulted in his obligation to supervise Mr Newell.
When asked about the nature and the extent of the supervision, Mr Muriniti said that, "Mr Newell has extensive legal experience. He has more practising experience than I do. So he requires very little in the form of day-to-day practice. Such supervision as I would be called upon would be of an administrative nature. "Is the work being done?" "Is that matter being attended to?" Basically that's it." Mr Muriniti said that he provided no supervision of a legal nature. He said he regarded Mr Newell as a highly experienced employee and that he has confidence in his legal skills. He said that this was despite the personal costs orders that had been made against Mr Newell in the past. He said that he remained confident that Mr Newell was both able and experienced.
Mr Muriniti further explained, "He's given work to do. He does it. And he does it competently, in my view. There are lengthy discussions between myself and Mr Newell concerning the matters such as the pleadings. So it's not a case of me saying, "Here it is. Off you go. Just do it." He does do it. He does the lion's share of the work, but we talk frequently about various issues and what should go in and what shouldn't go into those pleadings. They have been the subject of lengthy discussions."
Mr Muriniti said in his evidence that he continues to brief outside Counsel in other matters, but in respect of this matter, because it had been accepted on a "very compassionate" basis, he has not done so. However in his affidavit Mr Muriniti stated, "In lieu of briefing counsel, I have adopted the practice of assigning the work which ordinarily would be briefed to Counsel to my employed solicitor and he appears in this matter in the capacity of solicitor advocate instructed by me."
Ultimately it appeared that Mr Muriniti would only brief Counsel when Mr Newell could not do everything that needed to be done. Mr Muriniti and Mr Newell try to do most of the work "in-house", as they have done in this case.

The Conflict of Interest Arising from the Application for a Personal Costs Order and How it was Dealt With

The Foreshadowing of the Personal Costs Order

The Plaintiffs first gave notice to Mr Muriniti of their intention to consider a personal costs order against him on 6 August 2019, at a time when the Defendants had served only the Defence.
On 8 August 2019 the matter came before Gibson DCJ. Her Honour made orders for the service of the proposed Amended Defence by 15 August 2019. The matter was stood over to the Defamation List on 22 August 2019 for further directions and/or argument. Costs were reserved. The Plaintiffs again foreshadowed the application for a personal costs order against Mr Muriniti.
Mr Newell submitted that the email of 6 August 2019 showed, by inference, that the personal costs application "[h]ad a life of its own. It has nothing to do with the fact or concern about what are usually called wasted costs in that jurisdiction." Mr Newell explained that there was a serious question about collateral purpose, that ought to be dealt with on the question of costs "in a very serious way" as the Courts should be vigilant against costs applications that have an "intimidatory" effect. I allowed the cross-examination of Mr Goldsmith on that issue.
In his evidence, Mr Muriniti endorsed the view held by Mr Newell, that Mr Goldsmith had brought the application for a personal cost order for an improper purpose, in order to draw a divide between him and the Defendants, and that it was done "purely as a strategic device".
Mr Muriniti accepted that this was the same argument that he had advanced before the Federal Court in Young v Hughes Trueman [2016] FCCA 989. In that case the argument failed and the Court held that the application had been properly brought. Mr Muriniti denied that his "collateral purpose" argument was devised to disguise and shield from the failings of he and Mr Newell in the preparation of the Defendants' case.
Mr Muriniti accepted that he and Mr Newell were making a serious allegation against Mr Goldsmith and that it needed to be backed by evidence. For reasons that I will come to, I find that there is absolutely no evidence to support the allegation that was made against Mr Goldsmith.

Application for a Personal Costs Order against Mr Muriniti on 5 September 2019

On 5 September 2019, Mr Goldsmith made the application for a personal costs order against Mr Muriniti.
When the matter reconvened on 11 December 2019 Mr Goldsmith moved on his application for a personal costs order and again argued that: 1. The original Defence was absolutely hopeless; 2. The proposed Amended Defence (the subject of argument on that day) was equally hopeless; 3. The pleadings were simply taken from a book of forms and precedents without any real regard or consideration as to what an appropriate defence required; and 4. Mr Muriniti and Mr Newell have a tendency to file pleadings that are lacking in merit, knowingly in this case subjecting the Plaintiffs to increasingly significant and unnecessary costs, and where he and the Plaintiffs were rightly concerned that the Defendants did not have any funds or assets to meet any costs order.
Mr Goldsmith also submitted that he and the Plaintiffs held valid concerns about the propriety of Mr Muriniti and Mr Newell, including that Mr Newell had held himself out to be a barrister at a time when he was not.

The Obvious Conflict of Interest from the Outset

It was obvious to Mr Newell from the outset that his decision to continue to act for the Defendants and Mr Muriniti (and later also himself) put him in a position of conflict of interest.
Mr Newell initially dealt with the conflict by submitting that neither the legal practitioners nor the Defendants should pay the costs because there was no merit to the application.
Mr Newell then appeared to backtrack from the obvious position, that if the legal practitioners were arguing that they ought not pay the costs, the chances increased, so far as any bad pleading was concerned, that the Defendants ought pay the costs. He said, "The consequence of that application failing is that the clients may pay the costs, depending on the view that your Honour takes about the course of what's happened." He said, "They say that they expect that the costs would fall on to them...That's the appreciation that they record."
The following exchange occurred: HER HONOUR: That's got to be the position, hasn't it, Mr Newell? We're not arguing that no costs be paid, no orders for costs to be made, are we? Or should I say, are you? NEWELL: Probably not, but it HER HONOUR: I want to know yes or no, Mr Newell. NEWELL: Sorry, what's your Honour's question? HER HONOUR: I want to know yes or no. NEWELL: On which question? HER HONOUR: You said, "Probably not." NEWELL: It would not be the case that no costs would ever be payable on the basis of the proposed amendments. We do not see that as a likely outcome. HER HONOUR: The argument, then - back to where we were five minutes ago - the argument, then is that Mr Muriniti would be arguing that his client should pay them and not him. That's the argument, then, isn't it? NEWELL: He's not going to argue they should pay them. I appreciate that's implicit in resisting a cost application. HER HONOUR: Of course. NEWELL: But that's simply a repetition of the conflict that we all understand. He doesn't want them to pay them anymore than he wants to pay them himself, but there's a question of principle here about when and whether a cost application should be made, bearing in mind the impact on the system of justice.

Mr Newell's Continued Position on the Conflict of Interest

Nonetheless, Mr Newell continued to appear for both Defendants, and for Mr Muriniti, and later himself.
I was concerned that the only advice that the Defendants had received (on either the issue of conflict of interest or as to any decision to waive privilege as to how the various iterations of the proposed Amended Defence were prepared) was from either Mr Newell or Mr Muriniti.
Mr Newell reported that the conflict of interest had been resolved by the Defendants providing consent for him to appear for them whilst also appearing for Mr Muriniti (and indeed by this time also defending the personal costs order against himself).
Whilst Mr Newell had seen the particulars upon which the Plaintiffs relied in support of the application for personal costs orders, he did not know what information had been given to the Defendants. Despite the fact that Mr Newell, and not Mr Muriniti, were acting for the Defendants on this issue, Mr Newell had left this to Mr Muriniti to attend to. When pressed, Mr Newell said that neither he nor Mr Muriniti could remember if the Defendants had been given a copy of the particulars or not. One of the reasons why Mr Newell sought the particulars on a previous occasion was to give them to the Defendants for them to get independent advice. When pressed on the fact that Mr Newell had previously argued this, Mr Newell said that he believed that they had been given to the Defendants. The basis of that belief was not made clear. Mr Newell then dismissed the notion that the Defendants required the particulars. He said that he understood that the purpose of them was for he and Mr Muriniti to understand the allegations made against themselves. The exchange with Mr Newell on this issue gave me serious doubts about Mr Newell's candour.
It became apparent in debate that Mr Newell had not been dealing with the Defendants at all on this issue, despite purporting to act for them, and that this had been left to Mr Muriniti, despite the fact that Mr Muriniti was at that time under cross-examination and despite the fact that Mr Muriniti had never appeared for them at any time during the argument relating to the various Amended Defences or the costs application. I regarded that as an extremely serious matter.
Despite my urging, the Defendants have never received independent legal advice, with advice at all times being provided to them by Mr Muriniti. Mr Newell said that they simply decided not to get it and so he did not forward to them the particulars. Just how the Defendants could have made an informed decision on representation or whether or not they wished to waive privilege on any advice that had been given by Mr Muriniti or Mr Newell about the pleading without such information was not explained.
That day's hearing was conducted over an audio visual link ("AVL") in light of the restrictions placed by the COVID-19 virus pandemic. At one stage the AVL disconnected. After it resumed Mr Newell "corrected" his submission and said that Ms Eppinga had received the particulars. Given Mr Newell's earlier statement that he believed that they had not been provided to the Defendants and where both Mr Muriniti and Ms Eppinga were on hand to provide the earlier instructions, I was unconvinced by Mr Newell's statement.
In any event, I regard it as a clear breach of Mr Muriniti's and Mr Newell's ethical responsibility to the Defendants to ensure that the Defendants could make fully informed decisions regarding their representation. Mr Newell's response to the situation was to submit that he and Mr Muriniti were "happy for them getting independent legal advice" and that "they understand independent advice is an issue and they understand the consequences of the personal costs application. It is their decision, at the end of the day, whether they want to take the step of seeking independent advice and going through that process."
Mr Newell did not appear to understand his obligation, as I see it, where he and Mr Muriniti are in such a clear position of conflict of interest, to ensure that the Defendants had independent legal advice and to assist them in that process. I have no doubt that had they arranged for it, the Defendants would have accepted it.
So far as how Mr Newell perceived the conflict in continuing to act for himself, Mr Muriniti and the Defendants, I asked him whose interests he will prefer between Mr Muriniti and the Defendants when making submissions on the personal costs order application. He responded, "I'm going to submit everything that's in the interests of the - everything properly in the interests of the Defendants and everything properly in the interests of a proper decision by the Court in terms of the personal costs applications." That submission was incomprehensible and without substance. Mr Newell's position was then stated as follows: "I will submit that there should not be a costs order against the Defendants either."
The submission was contrary to Mr Newell's earlier submission, where he accepted that either Mr Muriniti or he on one hand, or the Defendants on the other, would have to pay the costs thrown away by reason of the amendments.
Mr Newell continued to assert that he could vigorously represent the interests of the Defendants, whilst at the same time suggesting that a personal costs order should not be made, "Because of the way that the amendment dispute was handled by the Plaintiffs."
I asked Mr Newell, for the purposes of exploring the difficulty in him appearing for all parties, what his fall-back position would be if I was to find that someone on his side ought pay the costs. Mr Newell responded, "That the strict standard of s 99 has not been met, that the application has a collateral purpose, that it's not in the interests of the Plaintiffs for an application having such a purpose to be made, the Defendants' best interests are protected by resisting that personal costs application. It is not a case of a simple matter that it's in the Defendants' interests to advance a costs application against their solicitors at this stage or any early stage of the proceedings" and that "[a] proper review of the large picture is that the Defendants' interests are being properly protected by Mr Muriniti doing precisely what he's doing"..."because it's still a toxic situation that's being constructed, irrespective of Mr Muriniti's anxiety to protect the Defendants"..."It's a toxic situation. It's designed. It is our submission the situation is designed to cause conflict."
The submission was at times incomprehensible and to the extent that I understood it, it did not answer the question.
It became apparent that Mr Newell was not going to make any submission on the fall-back position and that the only submission he would make would be that the personal costs application has no merit. Mr Newell saw no harm to the Defendants in simply submitting that the application for a personal costs order was "unusual and unmeritorious". He said, "I'm never going to submit that the Defendants should pay the costs. I'm simply going to submit that the s 99 standard has not been met."
When asked how Mr Newell could vigorously and appropriately represent the Defendants by "running dead" on the fall-back position, he described the problem as "conceptual but it's not real and practical." When alerted to the likelihood that someone in the Defendants' camp would be paying at least some of the costs (a matter that I regarded as axiomatic in light of the various amendments), and asked how his position could best serve the interests of the Defendants, Mr. Newell responded, "I have made my submission. It's this, that what is being created is a toxic situation. Mr Muriniti would resist at all costs not acting for the Defendants. The Defendants are entitled to form a view that's a toxic situation that they wish to avoid at all costs."
The submission, so far as I understood it, appeared to be that the Defendants would rather pay the Plaintiffs' costs of the amendments to the Defence than suffer the "toxic" situation caused by their lawyers having to pay them. However, there was no evidence from the Defendants to that effect.
Mr Newell also put forward the potential of yet a further conspiracy (the relevance of which is dealt with below in respect of the unrelated cases) which was that, in circumstances where he and Mr Muriniti had "a serious dispute with Lawcover and powerful persons associated with Lawcover" and where "one of the proceedings we're going to take involves a large number of lawyers who acted for Mrs Young and defrauded her. There is a proper anxiety about whether, if the Defendants obtain independent legal advice - but they haven't been told this at all - whether that person would be genuinely independent or would be seeking to cause damage."
It was a ludicrous submission and I have rejected it as any sensible reason to have any concerns about the Defendants receiving independent legal advice, which, in my view, was clearly needed.

The Presentation to the Court of the Defendants' Informed Consent

On 5 September 2019, I informed Mr Newell that he ought to consider whether independent representation was needed in light of the continued and obvious conflict of interest. When the matter returned to court on 11 October 2019 Mr Newell again appeared for Mr Muriniti and the Defendants. No evidence had been filed to explain how the conflict had been dealt with. Mr Newell said he had "a few documents" (the transcript of a mention before Gibson DCJ, some correspondence between the Bar Association and Mr Newell as to whether he was holding himself out to be a barrister, and some correspondence between the parties). Mr Newell said that he did not intend filing an affidavit as this was "not needed" and said that he wished to avoid unnecessary cross-examination. I insisted on affidavit evidence in respect of all matters, other than transcript.
I informed Mr Newell that any evidence to be relied on, other than transcript, must be supported by an affidavit and that any deponent needs to be available when the matter is next in Court. Mr Newell submitted that the other documents may not be so important and sought time to review his tender. It was abundantly clear to Mr Newell on that day that if the Defendants were to swear affidavits, they would be required at Court on the next occasion.
The matter was adjourned to 11 December 2019. At that time written consents by the Defendants, in the form of "irrevocable waivers", were produced by Mr Muriniti in an affidavit.
Mr Newell said that the Defendants acknowledged that they had been made aware of and seen the affidavits and related documents which had been filed in the proceedings by the Plaintiffs in support of their costs application. He said that they had been made aware of the terms of s 99 of the CPA and that an application is being made pursuant to it. He also said that the Defendants were aware from the documents that they had been given, and that the affidavits clearly disclose the allegations made by the Plaintiffs against Mr Muriniti.
I asked whether this included any advice to the Defendants about the prospects of success of such a costs application, as the waiver document appeared to indicate that advice had been given by Mr Muriniti or perhaps Mr Newell, that the application had no proper basis.
As is clear from the foregoing history it was I, and not Mr Goldsmith, who first raised the issue as to whether or not Mr Newell or Mr Muriniti could continue to act for the Defendants, in conflict with their own interest. Mr Newell argued nonetheless that Mr Goldsmith has used the issue to drive a wedge between him and Mr Muriniti on the one hand and the Defendants on the other. This was again a serious allegation, made against Mr Goldsmith with absolutely no foundation.
In any event, Mr Goldsmith explained that he believed that Mr Muriniti's response on 10 October 2019 to my enquiries (that the question of conflict had been addressed and resolved by virtue of informed consent) was so vague in detail as to be meaningless and that he regarded it as wholly inadequate and that this had prompted a greater consideration and concern on his part.
At that time I interrupted the cross-examination of Mr Goldsmith as I too had become increasingly concerned of the need to properly resolve the issue of the conflict before the matter proceeded further. Mr Goldsmith's cross-examination was temporarily postponed and the matter was adjourned so that the Defendants could be questioned by me.

Taking the Defendants' Evidence

The Defendants' evidence was taken via AVL from Mr Muriniti's offices. A number of times, when the Defendants were faced with questions regarding their attitude to taking independent legal advice and the consequences of having Mr Newell and Mr Muriniti appear for them on the personal costs order application, the AVL disconnected.
I sensed at the time, and a review of the transcript confirmed, for example, that a number of times Ms Eppinga commenced an answer as the link was disconnected, only to say something slightly different when the link was reconnected. I also found her evidence at times to be inconsistent and seemingly not the product of any real consideration (as set out below).
Given those observations, and my findings in respect of the conversation between Mr Newell and Mr Muriniti about Mr Muriniti's evidence when Mr Muriniti was under cross-examination and when the AVL was disconnected (referred to below), I have absolutely no confidence that the Defendants were not coached by someone in their answers, including during their evidence when the AVL link disconnected.
I have set out at length below the various matters that I put to the Defendants to ensure that they understood their rights. Given the adamant nature of both Defendants' responses, I am bound to accept their position that, contrary to their own interests, they did not wish to have any independent legal advice of any kind on the issue of conflict, or on the application, or to seek the assistance of any barrister without cost, to assist them in their proceedings going forward.
Mr Newell at one stage accepted that there would be a "serious conflict" for either he or Mr Muriniti to give advice to the Defendants as to prospects of success of the motion. Notwithstanding, Mr Newell, acting in the Defendants' interest, took no steps to ensure that the Defendants had such advice, and Mr Muriniti appears to have advised the Defendants in relation to the application, indeed at a time he was under cross-examination.
Given the maintenance of legal professional privilege by the Defendants, the content of that advice is unknown and it is therefore not possible to know to what extent the Defendants' attitudes have been affected by the advice given by Mr Muriniti and/or Mr Newell, given in clear and serious conflict of interest. However, given the findings that I have made on the question of who is to pay the Plaintiffs' costs, there has been in my view no prejudice to them in any event.
It is, however, appropriate in my view that the circumstances in which the Defendants were advised by Mr Muriniti and/or Mr Newell be examined by the Legal Services Commissioner to determine whether either Mr Newell or Mr Muriniti has acted in circumstances of unsatisfactory professional conduct or professional misconduct, and I refer the papers on that issue.

Ms Eppinga's Evidence

Ms Eppinga gave evidence that she was aware that there had been a claim by the Plaintiffs for a personal costs order against Mr Muriniti and that there was power in the Court to order that Mr Muriniti pay the legal costs if there had been serious negligence on his part. She said that she had read all the transcript of the proceedings.
I explained to Ms Eppinga that the reason generally why such orders were made was so that parties to litigation should not have to pay the costs of serious errors and negligence on behalf of their lawyers because it's simply not fair, for example, for her for her to pay those costs if those costs are properly paid by her lawyers. Ms Eppinga said she did not understand this proposition.
I asked Ms Eppinga as to whether she was aware of the circumstances in which a Court can make a personal costs order against a lawyer. Contrary to her earlier answer, she said that not only was she aware of it and had been told numerous times. She said she understood that the only basis upon which a Court can make a personal costs order is if it is satisfied that her lawyers have been seriously negligent in running her case.
So far as the conflict of interest is concerned, Ms Eppinga said she understood that it would mean that her lawyers would be arguing that she does not have to pay the costs and also arguing, that they do not have to pay the costs either. She said she understood that in order for Mr Newell to argue that Mr Muriniti does not have to pay the costs, it means that, logically, he is less in a position to defend her interests.
Ms Eppinga was adamant that she did not wish to obtain independent legal advice and that she had been offered an opportunity to get independent legal advice numerous times. However she also said that she was not assisted in that process, by someone being suggested or in any other way and she was simply told that she could get independent legal advice. That said, Ms Eppinga said, "If I wished to get some, I would have gone and got it."
I tried to explain to Ms Eppinga that the reason that I wanted her to have independent legal advice was because there was a reasonable argument that could be put that her lawyers, and not she, should have to pay the Plaintiffs' costs of responding to the many different versions of the Defence that has been put forward by her lawyers. Her response to my explanation was, "I don't agree."
I explained to Ms Eppinga that there was such a reasonable argument and that no one would be putting an argument on her behalf, increasing her exposure to a costs order. I explained that because her lawyers are going to argue that neither should pay the costs, no-one was going to separately argue that she should not pay them. I explained my concern that it might follow that she would be faced with a costs order in the vicinity of $80,000 in respect of the various changes to her pleading. Ms Eppinga responded that, "It seems a bit excessive."
Ms Eppinga did not appear to have been advised about the extent of her costs exposure. When asked whether she was aware when she made her decision that she might be exposed potentially to a costs order of some tens of thousands of dollars, she replied, "I do now." However she later said that she had been told "numerous times". I did not accept that answer in circumstances where neither Mr Newell nor Mr Muriniti had asked Mr Goldsmith about the Plaintiffs' costs to date and where that had only been revealed by Mr Goldsmith moments before.
Ms Eppinga went on to say, "What I'm trying to say is I feel like - I don't know how to put it, but hasn't the other side of this been doing that as well? Like, they're asking for particulars and all this stuff...and that's prolonged it as well."
I explained to Ms Eppinga that this part of the case was about the fact that her lawyers had drafted many versions of the Defence and every time that they send it to the Plaintiffs' lawyers it costs money for them to look at it, to come to Court and argue about it and that this had occurred on about five occasions. I explained that her costs exposure was probably in the order of about $40,000 or $50,000. Ms Eppinga said that she knew this when she made her decision not to engage independent legal advice. She then said, what was obvious, that she did not know the extent to her exposure as "Mr Goldsmith just said the amount".
I explained to Ms Eppinga that she may be asked to pay those costs in circumstances where Mr Newell is representing someone who could also be ordered to pay that amount so that she would have to pay nothing and I wanted her at Court, to ensure that she knew what was at stake and to make sure that she had been properly informed about that.
I explained to Ms Eppinga that I was not comfortable with the situation and that I needed to ensure that she had a fair hearing on this issue. At that point Ms Eppinga appeared to me to be upset and said, "Yeah, to be honest, I'm not comfortable about this whole thing either. It's really blown out a little bit more than it--".
What followed were a number of attempted exchanges between Ms Eppinga and myself on the issue. It was not transcribed but Ms Eppinga appeared to be asserting that Mr Goldsmith was in some way responsible for the various iterations of the proposed amended Defence and that the application for the personal costs order was in some way utterly inappropriate (a vision of the proceeding that accorded with the views of Mr Muriniti and Mr Newell).
I explained to Ms Eppinga that the position of her lawyers was the very reason she should, in my view, have obtained independent legal advice. I said, "That's one of the things that an independent lawyer can talk to you about. Because I know at the moment that's what you've been told by your lawyers, but you need to remember that on this application, they are not only representing your interests, but they're representing the interests of someone who is diametrically opposed to your interests. Does that make sense? That it's in Mr Muriniti's interests not to pay the costs order; which increases the likelihood that you have to pay it."
I also explained to Ms Eppinga that if she is ordered to pay the costs, that even if she had no money now to pay them, that obligation from a Court order can last a number of years, and that for example, money can be taken out of her wages for many years to pay that obligation. She responded, "Cool." However my note records that at this time she appeared to be quite upset with what I was telling her. She then said that she had been through it numerous times.
Ms Eppinga again said that she did not want independent legal advice. She said that she thought the independent legal advice was about "the conflict" and "the costs". She made no mention of the issue of the waiver of privilege.
Ms Eppinga also said, "But I don't have money to go to another lawyer, so that doesn't really work. So I can't--" When I asked her whether this was the reason why she did not want to get independent legal advice, because she thought it would cost her something, she replied "No; it's because I'm 100% happy with what I've got now, and I'm happy with it; I don't want anyone's else's opinion; I don't want it."
When I explained to her that this would mean that no one would speak up for her positively that she should not pay the costs, as opposed to Mr Muriniti, she said, "What, I didn't get that." When I asked her whether or not she was perfectly happy knowing that the way things are structured at the moment, that no one would stand up and say that Mr Muriniti should pay the costs, and that that increases her possible exposure to a very significant costs order, she said that she "did not know."
I explained to Ms Eppinga that with my assistance, she could obtain free independent advice about this issue, so that she was properly informed to make a decision. She said that she was offered that, and declined because she was happy with what she had "[b]ecause it's been a long time now, and I trust them with what they're doing, and I'm just happy to continue this way."
When I explained to Ms Eppinga that the Defence document had been amended four or five times, and in some circumstances it was to make amendments to even basic fundamental mistakes in her pleading, she said, "It's a messy situation, so I can understand how that has happened, yeah" and that they were asked to do "some pretty basic changes to the things by Mr Goldsmith". When I explained to her that a number of those changes had to be made because her lawyers have almost no experience in Defamation law, she said, "I feel like they're doing fine."
Ms Eppinga did not receive any independent legal advice about whether or not she ought to waive legal professional privilege. She said she had been told by her lawyers that she should get independent legal advice on the issue of privilege. When I asked her if she was content that she did not want to receive any further advice about whether or not she should waive privilege, she responded, "I won't say I'm content with any of this, but yeah." She said that she did not wish to obtain any further legal advice about whether or not she should waive privilege. However, when I then asked her whether she wished to tell me who is responsible for the different versions of her Defence or to keep that matter confidential, she said that she did not know.
I then explained to Ms Eppinga that that was a matter that I was considering and that it might make a very big difference potentially, as to whether or not she would be ordered to pay costs. I was part way through this explanation when the AVL again disconnected. When the link resumed she said that she did not wish to waive privilege.
Ms Eppinga said that she knew from the outset that Mr Muriniti and Mr Newell did not have any real experience in Defamation law. She said that she did not understand, until more recently, that Defamation law is a very specialised area, that it involves a particular special language at times, and that terms of art well understood by defamation lawyers are often not well understood by those who do not often practice in the area. She said that she understood that the running of specific defences such as qualified privilege and comment, being run in her case, can be particularly difficult even for lawyers who are very experienced.
Ms Eppinga said that she also knew that the Bar Association could provide to her, free of charge, a barrister who could act for her at least in preparing her pleadings without losing Mr Muriniti or Mr Newell as her lawyers, and that she was "offered that at the beginning of this". She said that although she was given a barrister's name and number, she did not want to explore that avenue because she was happy with and trusted her lawyers. She said that she did not discuss this with her lawyers and that it was up to her to decide. Just who had given her the name and number of the unnamed barrister was not clear and neither Mr Muriniti not Mr Newell mentioned doing this for her. I asked her whether her lawyers told her that from time to time Mr Muriniti does brief barristers to assist him in his trials. She said she did not know what that meant. She said that she had been told that she could have a barrister act for her who is specialised in Defamation law who could assist Mr Muriniti without any extra charge, but that she did not want one because she was very happy with what she had. She said, "I've come too far now especially to go back to square one. So it's not going to happen. I'm happy. I'm more than happy." I tried to explain to her that she would not be going back to square one, but she was adamant that she was more than happy with her legal representation.
When I asked her if she had any interest in Mr Muriniti briefing a barrister who would only charge her if she won the case and a costs order was made in her favour, she said "[a]ll I have interest in is, like, having this case go ahead and for it to take its course, and that's all I'm interested in…I just want to go forward with the case, with the lawyers I've got, and that's what I'm happy to do."
I explained to Ms Eppinga that there are nearly 100 barristers in New South Wales who practise in Defamation who have up to 61 years of experience in the area, any one of whom might be prepared to take her case while still retaining Mr Muriniti and Mr Newell. She said that she already knew this, that she did not want to engage a barrister, that she had been offered a barrister who she did not think had much experience because they were not much older than she and so she was happy with what she had. She said that she did not speak with them or contact them to make that decision. She said "[b]ecause I chose not to, because that was the decision I chose. I'm happy." I asked her why this was so. She replied "Leo [Muriniti] and Robert [Newell]. That's why. Because I'm confident in what I've got. I've been confident from the start, I'm still confident now, and I feel like we're talking about this prolonged stuff, and I feel like the only thing prolonging it now is this. So I'm happy with what I've got, and I just want to get moving now. Whatever happens in the end is going to happen, so".
Ms Eppinga said that she did not think she would change her view if it was the case that one of the reasons why the case has been so prolonged has been the actions of her lawyers. She volunteered, "[m]ore so the other party has done that." She again said that she had made up her mind and that she was happy with her legal representation. She agreed that no amount of information would change her mind.
I attempted to ask Ms Eppinga whether or not she wished to waive legal professional privilege. She said that she did not, and just wanted the case to go on. She agreed that she did not want me to know why her Defence had changed four or five times.
So far as the particulars document dated 3 April 2020 is concerned, Ms Eppinga said that she had had it for a while. When I asked her how she got it, she said, somewhat delphically, "I was given it." When asked from whom, the AVL disconnected. When it reconnected, Ms Eppinga said she received it from Mr Muriniti's secretary and that she came into the office and picked it up. I was unconvinced by her answer.

Ms Milham's Evidence

Ms Milham also confirmed that she had been provided with the materials set out in her affidavit and that she had received the transcripts of the matter every time it was in Court. She said she had received the particulars document dated 3 April 2020 after the last Court date.
Ms Milham appreciated that a claim for a personal costs order had been made against her solicitor and that this has put both Mr Muriniti and Mr Newell in a position where they are acting for her in conflict of with own interests. She understood that this, at least in part, had arisen because there had been about four or five different versions of her Defence put forward.
I explained to Ms Milham that I wanted to ensure that she had had legal advice on this issue, from a "person completely independent" advising her of her rights. She replied, "Yes. I have been advised very strongly. They have actually told me." She then clarified that this advice had not been independent.
Ms Milham said that she understood that any independent legal advice could be given to her in short time, briefly and free of charge. Ms Milham explained that she had already been to the Legal Aid and to "the pro bono scheme" for another lawyer, that she had spoken to numerous people and volunteered that she was extremely comfortable with her lawyers. She said she understood that she could obtain independent legal advice free of charge.
I explained to Ms Milham that there was a reasonable argument that could be put that her lawyers and not she should pay the Plaintiffs' costs of responding to the many different versions of the Defence put forward by her lawyers, and that with Mr Newell representing Mr Muriniti and her, that faced with a choice between her paying some tens of thousands of dollars in legal costs or her lawyers paying it, no one was going to positively assert that it should be her lawyers and not she that should pay it. She said that she understood this and that it increased her exposure to the risk of such an order being made against her instead of her lawyers.
Ms Milham said that she understood that her potential exposure might be in the order of 40 or 50 thousand dollars.
Ms Milham works part time. She said that she also understood that if she was ordered to pay those costs, that they could be ordered to be paid straight away and that money could be taken out of her wages every week to pay those costs.
Ms Milham understood that the purpose of any independent legal advice would be to advise her about the conflict of interest and the costs application. Ms Milham confirmed she did not wish for any independent legal advice.
She also said that she understood that her lawyers were claiming legal professional privilege on her behalf and that, as a result, the Court was not going to be informed as to the reason why the various changes were made to the Defence.
Ms Milham said that she had been advised about whether or not to claim privilege by "various people and the lawyer." When I asked her to specify who those people were, she said, "Well, my lawyers and just talking to different people. I don't have their names." I found the evidence that she had been talking to various different unnamed people difficult to accept. When I asked her, "When you say "your lawyers", do you mean you received that advice from Mr Muriniti and from Mr Newell?", the AVL disconnected.
When the AVL reconnected, Ms Milham then told me that the only lawyer who had given her advice about whether or not to waive legal professional privilege was Mr Muriniti, and that the latest of those meetings with Mr Murinti was just after the last Court appearance (when Mr Muriniti was still under cross-examination). As a result of that advice, Ms Milham did not wish to waive her privilege.
Ms Milham said that Mr Muriniti had told her that neither he nor Mr Newell were Defamation lawyers and that they have little experience in Defamation law. She understood that Defamation law is an extremely specialised area of the law and that people are best represented at times by those who are well familiar with the legal principles that operate in that area of the law.
Mr Milham said that she also understood that the Bar Association can provide her with the help of a specialised Defamation lawyer either free of charge or to only be charged if there's a costs order made in her favour, with Mr Newell and Mr Muriniti still involved.
Ms Milham said that she had not proceeded to get any independent advice because she had already spoken to numerous people (she nominated Legal Aid, the Law Society and another unnamed lawyer), and that with their advice and with Mr Muriniti's advice, she was comfortable. She said that she had also thought about having the assistance of a specialised Defamation barrister but did not want to take any steps to find out whether or not that was something she wanted.
She too, as noted above, had had a conference with Mr Muriniti whilst he was under cross-examination and where Mr Newell was appearing for the Defendants. She said that Mr Muriniti provided her with some advice in respect of the particulars alleged against him and Mr Newell.

Unreasonable Delay Occasioned by Mr Newell and Mr Muriniti in Bringing Forward the Defendants' Evidence on the Irrevocable Waiver

As I have already referred to, once it was obvious that the only advice that had been given to the Defendants, had been given by Mr Muriniti, who was not independent, and that this had undoubtedly informed the views of the Defendants in respect of all matters, I required that the Defendants provide an affidavit and be asked questions about it in Court as to whether the consent to have Mr Newell acting for them on the application was truly an informed one. I am of the view now having heard from them, that it was not.
In doing so, I set out for Mr Newell's benefit a number of matters that I expected to be covered in the affidavits. Mr Newell said, "I myself will deal with it, who [at that time] are (sic) not exposed to a costs order, will obtain the affidavits from the Defendants, if they're willing to give them and we will canvas all of the matters that your Honour has raised today." That did not occur. Some weeks later, on the next occasion the matter was before the Court, the waivers were simply produced without an affidavit. Mr Newell sought an adjournment.
I explained to Mr Newell that I did not regard him to be the appropriate person to prepare the advice to the Defendants (as he had suggested because at that time he was not facing a personal costs order) as he was also appearing for Mr Muriniti. I explained, "It's just not appropriate that you advise - well, I think I've probably already made clear that there are any number of pathways that can be adopted. Someone can provide that advice that is truly independent, someone who frankly it would be better is a Defamation law specialist, because they can then give advice about what is or is not wrong with the pleadings and I suspect the NSW Bar Association will provide someone to give pro bono assistance on that very limited issue and then affidavits can be done, so that I can be satisfied that both Defendants are properly informed in giving their consent." That did not occur.
At one point Mr Newell agreed that the Defendants be advised by someone who was truly independent. He then changed his mind and said, "I can't agree on behalf of the Defendants that they will consult a solicitor. I can agree that they will be told that that is an option that they might pursue. My instructions are, they're already fully aware of the Bar Association scheme and have rejected that in favour of having someone from their local community".
Initially Mr Newell submitted that the Defendants had been counselled to obtain independent legal advice. When I pressed him on the detail of what had occurred, he simply said that they had been "counselled about the existence of it, the availability of it". Mr Newell's lack of candour was obvious.
I again made it clear that I wished to ask the Defendants about their respective positions. I stated in terms, "Maybe they can put on some affidavits about that and I can ask them about that when we come back to Court." Mr Newell agreed.
Mr Newell also accepted that where Mr Muriniti had given advice about prospects, there would be a question of his independence.
At that point I adjourned the proceedings on the basis that I was sufficiently concerned about what was occurring to satisfy myself as to the basis of their consent other than that disclosed in the "irrevocable waiver" documents, as it seemed to me that the advice that was given was not sufficient to inform them.
Furthermore Mr Goldsmith, in his email of 1 November 2019 raised the specific matters that I raised, seeking affidavits from the Defendants in clear terms.
Mr Newell defended his position by relying on what he said were the Defendants' "Constitutional rights" as to whether they "choose to put on an affidavit or not" and that this would be up to the Defendants. I did not understand that submission and Mr Newell did not elaborate.
I reminded Mr Newell that is was simply not appropriate for the evidence to come from Mr Murinti, and not the Defendants, where there was a live question about a conflict of interest, a matter which Mr Newell only moments earlier appeared to accept.
I again made it clear that on the next occasion I expected the Defendants to be at Court to be asked questions about their respective affidavits. I said that a particular situation "might be informed by what questions are asked of them when it's back before me again" and later, "That might be informed by them having put on affidavits and being asked questions about them."
Notwithstanding that, when affidavits of the Defendants were finally filed, the Defendants did not present at Court to be questioned, and the affidavits did not fully expose the matters that had been raised previously with Mr Newell.
Mr Newell initially sought to rely on the fact that Mr Goldsmith had not required the Defendants for cross-examination. This was entirely contrary to the statements that I had made previously but was also contrary to Mr Newell's earlier statement that he believed that it was my concern and not Mr Goldsmith's concern that had resulted in the need to enquire of the Defendants. Mr Newell then said that he was concerned about me asking any questions of the Defendants because no privilege had been waived about the advice. The matter was again unnecessarily delayed so that the Defendants could appear. When the Defendants finally did appear, Mr Newell took no objection to questions being asked by me on the basis that it was a waiver of the Defendants' privilege, based on their "Constitutional rights" or otherwise.
The process of ensuring that the Defendants were properly represented on the costs application was, in my view, entirely frustrated by Mr Newell and Mr Muriniti. It ought to have been clear to them from the outset that they both had a clear conflict of interest and could not advise the Defendants in respect of the personal costs issue. They pressed on without ensuring independent advice. They failed in their responsibility to the Defendants, and to the Court. That responsibility fell entirely to Mr Newell in appearing for the Defendants, and to Mr Muriniti, in his role as the supervising solicitor. I find that the approach taken by Mr Newell and Mr Muriniti on this issue not only directly and unreasonably delayed the proceedings but was in breach of their professional obligations.

The Admission Into Evidence of the Unrelated Cases

In support of the admission of the past unrelated cases Mr Goldsmith submitted that the judgments "evidence previous findings that have been made against both Mr Muriniti and Mr Newell", and are admissible as tendency evidence. Mr Goldsmith had not served a tendency notice but had put Mr Newell on notice of his intention to rely on the cases. Mr Goldsmith asked that the requirement to serve the notice be waived.
Mr Goldsmith submitted that the judgments made clear that the underlying facts in those cases had a very striking resemblance to the underlying facts in this case so far as they relate to the incompetence of the lawyers and where applications were made with no evidence and pursued without reasonable foundation.
Mr Goldsmith also sought to rely, in submissions where relevant, on the principles of law set out.
Initially, Mr Newell objected to the unrelated cases being used as tendency evidence and submitted that Mr Goldsmith had a "collateral purpose" for the tender. He described the lack of notice as a serious problem. However, he accepted that the only legitimate reason the judgments could be admitted, was as tendency evidence. He said, "I'm on notice as to the logic of that proposition. It did not occur to us." He said that despite it being obvious from the fact of the materials, because the perceived "collateral purpose" was so obvious, the admissibility as tendency evidence had not occurred to him. This appeared to me to be an example of Mr Newell's judgment being clouded by his fixed ideas about Mr Goldsmith's collateral purpose.
Mr Newell said that he was prejudiced in that he had not prepared an argument in relation to the tendency issue. I allowed Mr Newell time to prepare his argument.
Mr Newell's argument was that it was necessary for Mr Goldsmith to establish that the judgments had some "substantial serious" probative value. He said that he was familiar with the judgments and there was no similarity with the unrelated cases, as that was "a conspiracy case" and that in this matter there is no suggestion that the Defendants do not have a proper Defence. He described it as "consciously alien" to the circumstances of this case.
Mr Newell was content that the evidence be admitted on a provisional basis, and that there would be final submissions about the admissibility at a later time.
Mr Newell said that he had no further objections to the Plaintiffs' evidence.
Mr Newell sought to cross-examine Ms Andrews. At that point, it became immediately apparent that some evidence was inadmissible and at that time, Mr Newell said he did have further objections, indeed he objected to her affidavit in its entirety, other than the annexures. Having struck out the offending parts of the paragraphs, Mr Newell did not wish to cross-examine Ms Andrews.
The above matters occurred in the context of an unnecessarily protracted exchange, where it was obvious that Mr Newell had not prepared the matter sufficiently and in particular, had not thought through what he wanted to object to and accordingly what he wanted to cross-examine Ms Andrews about.
When he came to cross-examine Mr Goldsmith, Mr Newell said that he wished to cross-examine "about the totality of the purpose" and "purpose of the whole application and the way it came about."
And so, having objected to it, Mr Newell then cross-examined back into evidence the unrelated cases that I had only provisionally allowed, including the facts surrounding De Costi Seafood Franchises Proprietary Ltd and Anor v Wachtenheim, about which Ms Andrews had said, that, "[t]he plaintiffs have noted that the time of those proceedings lasted more than 70 days and that the Plaintiffs are deeply concerned that the Defendant's legal representatives may unnecessarily prolong these proceedings", about which Mr Newell had earlier objected.
Mr Newell asked Mr Goldsmith to explain how he thought it was relevant to the personal costs application. Mr Goldsmith explained that he was aware of the three personal cost orders made against Mr Muriniti and that De Costi had lasted what appeared to be an incredible 70 days, and, he said, "alarm bells were ringing and ringing very, very loudly about the conduct of [Mr Newell] and Mr Muriniti. I have never in 40 years of practice encountered any legal practitioner with three personal costs orders against them. Alarm bells were ringing."
Mr Newell again asked Mr Goldsmith about the relevance of the De Costi matter to the costs application. Mr Goldsmith explained, "Firstly, it was a judgment in which costs were ordered against Mr Muriniti and Mr Newell and that as an experienced practitioner sent - raised warning bells with me. What is the conduct and the propriety of these legal practitioners? The second reason was that that case lasted more than 70 days. And when I put together those two facts, it was deeply troubling to me as to the conduct that you, Mr Newell and Mr Muriniti tend to engage in. And as somebody who is acting for Plaintiffs who are suing your clients, of course I consider the relevance or the potential relevance of your conduct."…"I had a huge concern and that concern has been justified by your conduct and Mr Muriniti's conduct in this case of your tendency to prolong matters unnecessarily, by making inappropriate applications, by failing to plead matters particularly and effectively being indifferent to all of the requirements of section 56."
For the reasons that I have identified, I regard the characterisation by Mr Goldsmith, of Mr Muriniti's and Mr Newell's conduct in this matter, as apposite.
Mr Newell suggested that Mr Goldsmith's real purpose was to "smear Mr Muriniti for the purpose of making sure this case never goes ahead." That of course, is an accusation of deliberately making applications for a collateral purpose, an allegation of serious wrongdoing by a solicitor. Mr Goldsmith rejected the suggestion, and pointed to the fact that this was exactly the same submission that had been made in the past when personal costs applications had been made. I find that the allegation is entirely without foundation.
Mr Newell asked Mr Goldsmith if he was aware that De Costi Seafood Franchises Proprietary Ltd and Anor v Wachtenheim had gone on appeal and whether he bothered to consider the outcome. Mr Goldsmith said that he did, and believed that the Appeal Court did not interfere with the personal costs order made. Mr Newell rejected the suggestion and submitted that the Court of Appeal "interfered dramatically" with the orders of Taylor SC DCJ.
Mr Goldsmith explained (without the benefit of the case in front of him) that the Court of Appeal did vary the costs order, but still held Mr Muriniti and likely Mr Newell personally liable for some costs, and that the percentage may have been reduced, he said "off the top of my head, from something like 50 per cent to 25 per cent."
Mr Newell rejected that contention and said that the matter had been remitted to the District Court to be assessed.
A fair reading of the decision on appeal is that the personal costs orders were maintained, and that the characterisation of the conduct by Taylor SC DCJ of Mr Newell and Mr Muriniti was not relevantly impugned.
Mr Newell suggested that, not having spoken to the De Costi parties or their legal representatives, Mr Goldsmith would be unaware that he and Mr Muriniti were presently representing themselves in that matter. I questioned the relevance of the questions. Mr Newell replied, "All right. Well, I am going to submit to your Honour that if you don't know that we're about to take proceedings against a number of parties to have the orders of the Court of Appeal and Judge Taylor set aside as having been obtained by fraud, then it tells you that there shouldn't be any reliance upon the judgment."
Mr Newell explained that the fact that he and Mr Muriniti were undertaking further litigation was relevant, "to whether any inference could be drawn as Mr Goldsmith is inferring". I did not understand the logic of the submission.
I enquired as to whether or not Mr Goldsmith's motives were relevant. Mr Newell said that he was going to suggest that the application had been brought for an improper purpose based on the announced intention to bring a costs application before there were any wasted costs, relying on the email sent on 6 August 2019.
The transcript reveals that Mr Newell's approach to the task lacked precision, indicative of a lack of preparation. Indeed on a number of occasions, Mr Newell appeared to be: unfamiliar with the subject matter and the legal principles; and unfamiliar with the affidavits.
Having reserved a decision on the tender of the judgments in the unrelated proceedings, where Mr Newell had argued that they were not relevant, Mr Newell then said that the unrelated proceedings were relevant to show a collateral purpose on the part of Mr Goldsmith.
Importantly, at that point, Mr Newell consented to reliance on the unrelated proceedings by Mr Goldsmith, for the tendency purpose (a matter to which I will return in detail). Again this was illustrative of a lack of consideration of the issues by Mr Newell prior to coming to Court.
Accordingly, I have had regard to the judgments in the unrelated proceedings in three ways: as tendency evidence as articulated on behalf of the Plaintiffs (where I find that it does show the relevant tendency); as evidence said to show a collateral purpose on the part of Mr Goldsmith (which I find it does not); and where appropriate, as precedent.

Did Mr Goldsmith Honestly and Reasonably Believe that Mr Newell Had Held Himself Out to be a Barrister, to Add to His Concerns, So As To Justify the Seeking of a Personal Costs Order?

Again illustrative of a lack of preparation and consideration of the relevant issues, having rejected the evidence objected to by Mr Newell in Ms Anderson's affidavit about a conversation during which she was lead to believe that Mr Newell was holding himself out to be a barrister, Mr Newell cross-examined it back into evidence through Mr Goldsmith, on the basis that it pointed to some collateral purpose on the part of Mr Goldsmith in bringing the application for a personal costs order.
Mr Newell explained it this way, "If an application is brought for collateral purpose, there's an inference to be drawn against the totality of the claim, in my submission. It is not a matter collateral to the merits, because it's a kind of inference that is available to the Court. It's a fortiori, available" and relevant. He further explained "...the system of justice could not operate generally and a fortiori, insofar it is calculated to protect persons of limited resources if this kind of mischief is contemplated. It cannot be the case that judges warn again and again against applications that have an intimidatory effect to the prejudice of persons of limited means and yet it is not relevant to the exercise of your Honour's discretion. That is impossible."
As I understood it, the submission was that Mr Goldsmith did not believe that Mr Newell had ever held himself out to be a barrister, either to Mr Goldsmith or in any other circumstance, indicative of his collateral purpose in bringing the application.
Mr Newell accepted that he had not been a barrister since 30 June 2014, but had been a solicitor since that time. Prior to 30 June 2014, Mr Newell practiced as a barrister from Second floor, Wentworth Chambers.
In his evidence Mr Goldsmith confirmed that, either at or before the Court appearance on 6 August 2019, Mr Newell had had a conversation with him and Ms Andrews where Mr Newell had suggested that he was a barrister, but said that he could not recall precisely what Mr Newell had said. He said Mr Newell had said something that gave him and, he believed, Ms Andrews, the impression that he was a barrister.
Mr Newell thrice suggested to Mr Goldsmith that this was never said. Mr Newell suggested that there had in fact been a conversation with Mr Goldsmith in which the question of him being a barrister was raised and that Mr Newell had said that he had been a barrister and that he presently was not and that, "there were going to be proceedings out of how it came about that [he] was not." Mr Goldsmith rejected the suggestion that this had occurred. There was no evidence led to contradict Mr Goldsmith.
On 6 September 2019, the Bar Association received a query from Mr Goldsmith about whether Mr Newell was a barrister, by reference to a LinkedIn account, a copy of which was provided to the Bar Association. The LinkedIn page at that time, some five years after Mr Newell was no longer a barrister, described Mr Newell as "Owner Wentworth Chambers" and the Bar Association, Mr Goldsmith said, took the view that this might form a misleading impression that Mr Newell was (still) a barrister in Wentworth Chambers. This inquiry of the Bar Association provides contemporaneous support for Mr Goldsmith's evidence, that he believed from his conversation with Mr Newell in early August 2019, that Mr Newell was holding himself out to be a barrister.
It was suggested that the letter to the Bar Association had been prompted not by legitimate enquiry, but by what had occurred at Court at the hearing on 5 September 2019. Mr Goldsmith rejected that completely and said that although the letter was dated on 6 September 2019, it had taken a number of days to draft the letter and get instructions about it, so it was likely put in motion prior to the hearing on 5 September 2019. I reject Mr Newell's submission that Mr Goldsmith's letter to the Bar Association could not have been written with the genuine intention of ascertaining whether he was a barrister and that it could only have been mischievous.
Mr Newell said from the bar table that "...the LinkedIn page, it's not used at all. There's no details there. It is old hat". Mr Newell did not give evidence about that and he did not suggest that the Bar Association's anxiety to remove any doubt about the LinkedIn page was anything other than appropriate.
I accept that by 6 September 2019 Mr Goldsmith had formed the view that Mr Newell was holding himself out to be a barrister and that he later found confirmation from that in a LinkedIn website, although that was not information Mr Goldsmith had when he sent the email on 6 August 2019.
Mr Goldsmith gave evidence that a number of judgments also suggested to him that Mr Newell had been holding himself out to be a barrister. Mr Newell challenged this.
Mr Goldsmith pointed to De Costi Seafoods & Anor v Wachtenhein (No 6), where it was observed "Mr Robert Newell, a barrister" and to Muriniti v King (2019), where it refers to Mr Newell as "Counsel" and says, "Mr R Newell: Representation Counsel" and "LC Muriniti & Associates, solicitors".
Mr Goldsmith said that when he read King v. Muriniti (2019) he regarded it as prima facie evidence at least, that Mr Newell was at that time holding himself out to be a barrister. Mr Newell responded that he was "flabbergasted". By way of further explanation Mr Newell said that the fact that he was not a barrister at the moment is the subject of a serious complaint by him and will be the subject of proceedings in the near future.
Mr Newell again suggested that the enquiry of the Bar Association as to whether or not Mr Newell held a barrister's practising certificate could not have been a genuine enquiry, because Mr Goldsmith knew at the time that he sent the letter that Mr Newell was not in fact a barrister. Mr Goldsmith rejected the proposition. He said, "I didn't know that at all. You had indicated, you had stated or suggested that you were. Your LinkedIn - there was a LinkedIn listing indicating that you were and we had judgments indicating that you were."
Mr Newell put the proposition that Mr Goldsmith acted with the "mischievous purpose of causing professional problems" for himself and Mr Muriniti. Mr Goldsmith rejected the idea.
Mr Newell also put the proposition that because Mr Goldsmith had inferred as at 5 September 2019 that the Defendants did not have any money, or were persons of limited or negligible resources, this informed part of the reason why he brought the application for costs against Mr Muriniti. Mr Goldsmith responded, "The foundation of the application for the personal costs order against Mr Muriniti is the fact that you have prepared and sought to obtain leave to file on five occasions defences that are not properly formulated. That forms the foundation of the application for the personal costs order against Mr Muriniti. That is the principal foundation. When one looks at making an application, one looks at a whole range of other issues''. This included his views about the means of the Defendants. I did not regard Mr Goldsmith's reasoning to be in any way improper.
In his evidence Mr Muriniti said that since being employed by him, whenever Mr Newell has appeared and Mr Muriniti has been present, Mr Newell has always appeared as a solicitor. Mr Muriniti said that he was not present with Mr Newell for "interlocutory matters and so on", but in hearings of this kind (which I understood to be a reference to final hearings and appeals) he is present and would not allow Mr Newell to represent himself as Counsel. He said that any reference to Mr Newell as a barrister or as Counsel in Court documents after 30 June 2014 were "mistakes".
Mr Muriniti explained that when they appeared in 2012 in the De Costi matter, Mr Newell was a barrister. When taken to the judgment in 2016, where Mr Newell is referred to as a barrister, he explained it as containing an error.
In the matter of King v Muriniti, which was heard in March 2018, it was also noted that Mr Newell appeared as counsel. Mr Muriniti explained that he may have appeared as a "solicitor advocate". Again he explained the notation in the judgment as an error.
Mr Muriniti accepted that published judgments referred to Mr Newell as "a barrister" or "counsel", and said that, "those are errors in the judgment with all due respect to the judges in the Courts in question". Mr Muriniti said, "There may have been errors in the judgment" and in some cases Mr Newell was in fact a barrister at the time.
Mr Muriniti further explained that at all times he appeared with Mr Newell in various matters, he had always announced himself as a solicitor and as such he surmised that it had to be an error. However, both Mr Newell and Mr Muriniti accepted the proposition that if a Court recorded such matters, the content of the written notices of appearance likely determined what was written in any judgment, rather than anything that was said.
Mr Newell said that he wanted to give evidence and he wanted to respond to the allegation. However, he did not seek to file an affidavit thereafter, despite his opportunity to do so.
I accept Mr Goldsmith's evidence that he genuinely believed that Mr Newell had held himself out to be a barrister and I find that whatever was said by Mr Newell, both Mr Goldsmith and Ms Andrews were left with the impression that Mr Newell was a barrister. I do so for a number of reasons: I found Mr Goldsmith to be a reliable and truthful witness; his evidence is consistent with the information contained on Mr Newell's LinkedIn page; it is corroborated by his enquiry of the Bar Association, it is consistent with a number of judgments; and because I find it inherently unbelievable that Mr Newell would engage in the conversation that he put to Mr Goldsmith in cross-examination, and find that this conversation did not take place. Indeed, where Mr Newell did not give evidence, there is no evidence that this occurred.
Mr Newell submitted that an application for costs against a solicitor is apt to intimidate him from representing that client and that Mr Goldsmith relied on irrelevant matters designed to bring discredit on Mr Muriniti and perhaps Mr Newell, so as to discredit them in the eyes of the clients, with an intention to destroy the solicitor/client relationship so that the defendants would be at the mercy of the plaintiffs. I reject that submission.
I find that Mr Goldsmith had good reason to be concerned about the way in which the litigation might be conducted by Mr Newell and Mr Muriniti, such that what might otherwise be regarded as a premature application for a personal costs order, in this case was not driven by any improper motive on Mr Goldsmith's part.
Indeed, I am sufficiently concerned about Mr Newell's conduct to also refer that matter to the Legal Services Commissioner for investigation of Mr Newell as to whether he has been falsely holding himself out to be a barrister, and whether or not that amounts to unsatisfactory professional conduct or professional misconduct, and I refer the papers on that issue.

The Notice to Produce

The Plaintiffs issued a Notice to Produce ("the Notice") seeking production of two sets of documents: documents relating to the "irrevocable waivers"; and Mr Muriniti's and Mr Newell's timesheets.
No documents were produced in relation to the preparation of the irrevocable waivers.
Mr Newell initially did not produce all of the relevant timesheets, producing only a single page (page 6). Mr Newell was initially not in a position to provide the documents and provided no reasonable excuse for his failure to do so, causing delay. They were produced on a later occasion.
The Defendants initially filed a motion to set aside the Notice and argued the lack of relevance of the documents. I raised with Mr Newell the fact that he had proffered at least some of the documents in Mr Muriniti's own affidavit and that this may be an indication that the documents were at least potentially relevant. Mr Newell responded "We're looking for that. I don't know why we can't seem to find it." He appeared to accept that any documents which related to the waivers would be prima facie relevant. At that time Mr Newell appeared to be scrambling to locate the Notice, and asked me if I had seen it. I explained that I had a copy of it in front of me.
As to the timesheets, Mr Newell submitted that they were irrelevant. However, he then appeared to accept that the timesheets had been sought because the advice regarding the irrevocable waivers had been given orally and where there were no file notes in existence and no drafts of the waiver documents, the timesheets may be relevant. They were also obviously relevant to the extent they revealed the preparation of the various iterations of the Amended Defence.
Again, Mr Newell appeared not to have properly prepared his case. I ruled against Mr Newell on the issue of relevance.
Mr Newell then argued that the Notice should be set aside and that the documents should not be produced to the Court because the timesheets were privileged. That is clearly no reason not to produce the documents and eventually they were produced to the Court for me to determine the question of privilege.
Given the lack of preparation by Mr Newell, each of the time entries was dealt with in a protracted fashion. Mr Newell clearly had not turned his mind to the particular entries in the timesheets and that resulted in me being required to identify any entries which did not appear to be privileged, only to have Mr Newell accept, once he looked at them, that the particular line entry was either not privileged or about which he took no issue with its production. Mr Newell had obviously not addressed his mind to this issue prior to the time. This caused undue delay. That being so, the administrative task of excising the clearly privileged material from the timesheets with as little further delay as possible, was left to me and my Associate during a morning tea or luncheon adjournment. Eventually the relevant entries were admitted into evidence without objection by Mr Newell.

The Conduct of Mr Newell and Mr Muriniti Whilst Mr Muriniti was Under Cross-Examination

In my view, both Mr Newell and Mr Muriniti have breached their ethical obligations whilst Mr Muriniti was under cross-examination: in conferring with each other; in giving instructions and taking advice; and, in the case of Mr Muriniti in approaching the Court with correspondence and providing advice to the Defendants. I have set out below those matters in detail.
In light of: my earlier warning to Mr Muriniti; his and Mr Newell's understanding of their obligations not to discuss evidence whilst under cross examination; and their many years of litigation experience, the following matters are in my view an extremely serious breach of their obligations as both Mr Muriniti and Mr Newell understood them, and I propose as a result to also refer that matter to the Legal Services Commission for investigation as to whether or not Mr Newell and/or Mr Muriniti ought be dealt with for unsatisfactory professional conduct or professional misconduct.

Mr Newell and Mr Muriniti Both Understood Their Obligations

In order to explain the fact that Mr Muriniti had been providing ongoing advice to the Defendants, at a time when he was defending a personal costs order, where Mr Newell appeared for the Defendants and where Mr Muriniti was still under cross-examination, Mr Newell said that Mr Muriniti did not understand that he was still under cross-examination during the adjournment period. The submission was made entirely without foundation, for the reasons that follow.
Mr Newell also clearly knew of the obligation of a witness not to talk about his evidence whilst under cross examination. Indeed Mr Newell was of the view that it would be improper, without the consent of one's opponent, to talk about the matter at all whilst under cross examination. This is clear because he relieved Mr Goldsmith of that impediment during a previous adjournment period

Mr Newell Comments to Mr Muriniti about His Evidence during Questioning

Having become concerned about the circumstances in which the AVL was disconnecting so readily during the examination the Defendants, I directed that a landline also be used with the parties on speakerphone to maintain an audio connection with Mr Muriniti's office at all times. Accordingly, during the latter part of Mr Muriniti's cross-examination, when the AVL again disconnected, the telephone link was still operational.
During that time, Mr Newell commented to Mr Muriniti about his evidence. Mr Newell admitted that he had said to Mr Muriniti that I was right to classify the conspiracy in the way that I had, that is to tell Mr Muriniti that his evidence was not quite accurate, a matter that I regard as an extremely egregious breach of his obligations.
Mr Newell accepted that he knew that if a witness is being cross examined, their lawyer is not to make any comment prompting the witness in respect of their evidence. At one point he tried to justify his untenable position. When I asked Mr Newell to explain why he had done this he said, "Well, that's my view." He ultimately accepted that he should not have done it and described it as a "slip".
I should record that I did not hear Mr Muriniti respond to Mr Newell's commentary about his evidence.
However, equally concerning is the fact that Mr Muriniti was less than candid in his evidence about the conversation with Mr Newell, saying that he "thought" that Mr Newell made a comment. When pressed, he accepted that he knew that Mr Newell had made a comment about his evidence only moments before.

Mr Muriniti Continues to Advise the Defendants and Confer with Mr Newell Whilst under Cross-Examination

Mr Muriniti then said that he did not understand that his evidence might potentially cover the issues that were concerning me about the proper advice being given to the Defendants. Mr Muriniti said, "I didn't understand that I couldn't convey to my clients the concerns expressed by your Honour and the exhortation that they should seek independent legal advice." Where Mr Newell was acting for the Defendants, there would be no reason for Mr Muriniti to do so and I did not accept his evidence given the clear relevance that has had in the proceedings.
Furthermore, as I explained to Mr Muriniti, "My understanding so far as Ms Milham at least is concerned is that you went somewhat further than that and you yourself provided what cannot be regarded as independent legal advice on the issue of privilege. Is that the case?" At that point, the AVL again disconnected, providing Mr Muriniti with some time to consider his answer.
Upon resumption, I again said to Mr Muriniti, I had understood from Ms Milham's evidence at least that he went somewhat further than that and provided to her advice on her rights in respect of legal professional privilege. The following exchange took place: A. Your Honour, I'm trying to recall. Q. Please refer to any notes if you've got them, if you can't remember, Mr Muriniti. A. I didn't take notes because the conferences were of narrow scope. I have a recollection - the question of legal professional privilege has been discussed prior to my giving evidence. So that was discussed on other occasions. My conference with Ms Eppinga and with Ms Milham was limited to simply providing them with a copy of the transcript and a copy of the particulars and telling them that your Honour had expressed a view that I should convey to them, in strident terms, that they should consider getting independent legal advice. Q. Was that the extent of the advice that you say you gave in respect of legal professional privilege? A. Yes, your Honour.
Mr Muriniti then said, contrary to Ms Milham's evidence, that he had not discussed on the last occasion that he saw the Defendants, the issue of legal professional privilege.
For the reasons that I have stated, and for reasons also that follow, I do not accept that evidence and I find it highly likely that Mr Muriniti continued to advise the Defendants, and confer with Mr Newell during the period he was under cross-examination.

Mr Muriniti Confers with Mr Newell In respect of the 22 April 2020 Email

Despite the fact that Mr Muriniti had Mr Newell acting for him and despite knowing that he was under cross-examination, on 22 April 2020 Mr Muriniti sent to my Associate (without obtaining the consent of Mr Goldsmith) an email enclosing submissions objecting to being asked particular questions under cross-examination and complaining more generally about the way in which Mr Goldsmith had been conducting the hearing.
Mr Muriniti explained this extraordinary step by saying, "I sent them because Mr Newell drafted them and I signed them and sent them." He did not regard that step as being wholly inappropriate as it was "a simple procedure of signing the submissions". He said that he did not discuss the submission, just signed them and sent them. He said that he was "merely a conduit." Indeed he later said that he did not recall the correspondence at all, despite it only having been sent the day before.
I find it inherently unbelievable that any competent and experienced solicitor would put his name to submissions put forward on his behalf without reading them. Particularly in this case where Mr Muriniti and Mr Newell are clearly working in concert and highly cooperatively in this matter. If that is what occurred, it means that Mr Muriniti had no idea what was being said on his behalf and Mr Newell had no way of knowing whether what he put was on instructions. Either way, I regard the conduct as highly concerning and in clear breach of his, and perhaps Mr Newell's, ethical obligations.
If Mr Newell in fact drafted it and Mr Muriniti was merely a conduit for the correspondence, it is highly misleading, given that it has the following characteristics: Mr Newell is being addressed in the third person; Mr Muriniti is also addressed in the third person. There is a joint proposal, presumably from both gentlemen as to how to cross-examine Mr Muriniti in future. The letter was signed under the hand of Mr Muriniti.
When I raised this with Mr Muriniti, Mr Newell intervened. This was not clear on the transcript because Mr Newell started at that point to talk about himself in the third person and as if he was Mr Muriniti.
Ultimately Mr Muriniti said, "I can tell your Honour, however, notwithstanding appearances, that that letter was drafted by Mr Newell and sent by my personal assistant to your Honour's associate." I then asked him if he had any input into the email to which he responded "I don't believe I did, your Honour, no. I don't think so. It was drafted by Mr Newell. I may have."
The following exchange then occurred: HER HONOUR: Q. It was only yesterday, Mr Muriniti. Did you or did you not have input into the draft? A. Well, I'm trying to - Mr Newell drafted the letter, emailed it and I gave instructions, as per Mr Newell's request, for it to be forwarded to your Honour's associate by my assistant. So to the extent that I gave instructions to my assistant to forward it to your Honour, yes, I had that input. Q. I'm wondering why you think it's appropriate, whilst you're under cross examination, to allow for the kind of email that was sent to my associate at 10.42 yesterday. What was its purpose? A. I can't answer as to the purpose because it was sent at Mr Newell's behest on his advice.
Mr Newell did not give evidence and so there is no explanation from him as to why such an extraordinary step was taken.
Ultimately it became clear, despite some suggestions to the contrary, that whilst Mr Muriniti was under cross-examination and knew that he could not talk about his evidence, he gave instructions and obtained advice from Mr Newell precisely about his evidence, that is to say, about the kinds of questions he should be permitted to be asked in cross-examination going forward.
I regard this as an extremely serious breach of Mr Muriniti's and Mr Newell's obligations as they understood them, by Mr Muriniti and Mr Newell.

Mr Newell's Performance During This Motion Increasing Costs

Overall Mr Newell's performance in Court was poor. This unduly meant that the proceedings were unduly protracted and it led directly to the incurring of unnecessary costs and delay. I have already provided some examples of this in the context of dealing with the Notice and there are further examples given in relation to his submissions on the various iterations of the Amended Defence.
Furthermore, at times when Mr Newell was addressing the Court in person (I made the obvious concession when the parties appeared via AVL) he did not stand, where given his experience, he knew that this was appropriate Court etiquette. Apart from it being a discourtesy to the Court, it made it difficult to know if he was addressing me, obtaining instructions or speaking to Mr Goldsmith, adding to the delay.
On one occasion Mr Newell was eating a muffin whilst in Mr Muriniti's office and appearing in Court via the AVL. His response to that was most unsatisfactory.
I formed the view overall, that Mr Newell was either not aware of, or not overly concerned with, the normal Court protocols.
More substantially perhaps, there were many instances in which it appeared to me that Mr Newell was incompetent in defending this application and in conducting the Defamation action more generally, by reason of either a lack of understanding and experience or a lack of preparation, or both. I have already given some examples of this.
As a further example, at times whilst he was under cross-examination, Mr Muriniti had to object to obviously objectionable questions, to protect his own interest, where Mr Newell had failed to do so. At one point, having raised almost no objection to the questions being asked, Mr Newell said that the cross-examination of Mr Muriniti had been "badgering" for a long time. At other times Mr Newell appeared to forget that Mr Murinti was giving evidence, and was discussing matters with Mr Muriniti as he went.
Mr Newell's grasp of many of the principles in Defamation law appeared to be poor (a matter to which I will return in the context of the various iterations of the proposed Defence). That is perhaps understandable given his utter lack of previous experience in this area, having conducted only one Defamation case before this. Furthermore, Mr Newell's advocacy was, in my view, also at times rudimentary, particularly in light of his purportedly long litigation experience.
These deficiencies unduly prolonged the proceedings on many occasions.

Who Prepared the Pleadings?

Mr Muriniti was asked whether he accepted any responsibility for the provision of the four versions of the Defence. He stated "Mr Newell is my employee and as the American Presidents like to say, the buck stops here. Of course I accept responsibility. I accept responsibility. I do not say I have liability. That's a matter for the Court."…"I accept that Mr Newell drafted some defences and if there's - if there is a fault with those defences, as - as his employer, I am responsible. If there is."
I sought clarification in the following terms : Q. So do you say that you had no input into any of the defences? You've taken no instructions and have had no input into the drafting of any of the versions of the defence? A. I have - the - the drafting of the versions of the defence has been delegated to Mr Newell as an experienced litigator.
Mr Muriniti said that he saw the letter of objection to the first pleading and discussed it with Mr Newell. He said that he asked Mr Newell "to consider it, do appropriate research, and address the issues."
Mr Muriniti agreed that even in his role as Mr Newell's supervising solicitor, he did not take over the taking instructions for or drafting of any versions of the Defence. He said that this was despite there being five proposed versions. He said, "The iterations from two, plus the other two, that was left to Mr Newell and I did discuss it with him. He did tell me and explain to me what the issues were that he was being asked to address based on what Mr Goldsmith was objecting to but the drafting was left up to him."
However, Mr Muriniti's timesheets provide quite a different account as set out below.
In my view, either Mr Muriniti's evidence or his timesheets is untrue, or perhaps both. I do not regard it as a matter of being incorrect, but honest. This is an extremely serious matter. I propose to refer that matter to the Legal Services Commission for investigation as to whether or not Mr Newell and/or Mr Muriniti ought to be dealt with for either unsatisfactory professional conduct, or professional misconduct in respect of the evidence and/or the timesheets.

Work on the Pleading Prior to the First Argument on 5 September

According to his timesheet, on 11 March 2019 Mr Newell spent just under an hour perusing the Statement of Claim. On the evidence, no work appears to have been done on the pleading after that date, until 26 April 2019, that is after the Defences were due.
On 27 March 2019 the Defendants sought from the Plaintiffs an extension of 14 days for the filing of the Defences and Cross-Claims.
On 28 March 2019 Mr Newell attended Court.
According to his timesheet, almost a month later, on 26 April 2019, Mr Newell spent a little over an hour preparing "draft proposed amendment with small revisions dealing with publication uncertainty".
According to his timesheet, on 19 June 2019 Mr Muriniti purportedly spent eight hours preparing the Defence and perusing the Statement of Claim. He also purportedly spent time reviewing the Defamation Act, relevant cases and "all matters incidental thereto".
According to his timesheet, on 26 June 2019 Mr Muriniti spent a further four hours amending the Defence and liaising with Mr Newell in settling the Defence. Mr Newell's timesheet indicates that he spent one hour conducting "defamation research and sending an email to Mr Muriniti with a case from the Law Society Library. He purportedly spent slightly over an hour "drafting particulars of justification re California/USA history" and emailing them to Mr Muriniti.
According to his timesheet, on 26 June 2019 Mr Muriniti spent a further four hours amending the Defence and liaising with Mr Newell settling the Defence.
According to his timesheet, on 27 June 2019 Mr Muriniti spent a further eight hours attending to finalising the Defence and Cross-Claim, liaising with Mr Newell to settle them, meeting with the Defendants in order for them to verify the Defence and Cross-Claim and "all matters incidental thereto". Mr Newell's timesheet indicates that he spent about 6.5 hours on that day liaising with Mr Muriniti and attending to the drafting of the amended Defence and Cross-Claim.
The first Defence was provided on 27 June 2019.
According to his timesheet, on 12 July 2019 Mr Muriniti spent half an hour perusing the letter from Mr Goldsmith regarding the Defence and Cross-Claim and considering it.
According to his timesheet, on 22 July 2019 Mr Muriniti spent a further three hours attending to further amending the Defence "as per observations made by Goldsmith in the letter of 12 July 2019", researching the law, discussing the amendments with Mr Newell, sending an email to Mr Goldsmith advising that the Defence would be amended as per his observation and requesting that the Plaintiffs refrain from further action until the amended Defence is settled "and all matters incidental thereto". Mr Newell's timesheet states that he spent only five minutes working on this matter on that day, in which he simply sent the draft amended Statement of Cross-claim and proposed Amended Defence to Mr Muriniti. There is no mention of liaising with Mr Muriniti.
According to his timesheet, on 24 July 2019 Mr Newell spent three hours researching "decided cases defamation issues".
According to his timesheet, on 30 July 2019 Mr Newell emailed "justification particulars" to Mr Muriniti.
According to his timesheet, on 31 July 2019 Mr Muriniti spent a further five hours liaising with Mr Newell in further preparing and editing the amended Defence, preparing a schedule of particulars in respect of paragraphs 4, 7, 16 and 19 of the Statement of Claim and "all matters incidental thereto". According to his timesheet, Mr Newell spent four hours that day researching "further research principles associated with defences to defamation claims".
According to his timesheet, on 1 August 2019 Mr Newell spent two hours drafting the proposed Amended Defence and sent an email to Mr Muriniti advising re requirements for particulars of justification and honest opinion.
According to his timesheet, on 1 August 2019 Mr Muriniti wrote to Mr Goldsmith informing him that the Amended Defence and Cross-Claim would be filed on 2 August 2019 and not to relist the matter. The pleading was not filed on that date.
According to his timesheet, on 6 August 2019 Mr Muriniti spent a further eight hours attending to a number of matters including finalising the Amended Defence and Cross-Claim and liaising with Mr Newell in relation to it. Newell's timesheet records that on that day he spent only 40 minutes dealing with emails regarding various changes and adjustments to the draft proposed Amended Defence.
According to his timesheet, on 7 August 2109 Mr Muriniti spent a further eight hours finalising the Amended Defence, liaising with Mr Newell and "all matters incidental thereto". Mr Newell's timesheet records that he spent only two hours on that day drafting the proposed Amended Defence, perusing an email or emails from Mr Muriniti with the current version of it, and further considering the strike out application and his response to it.
According to his timesheet, on 8 August 2019 Mr Muriniti spent a further four hours attending to a number of matters including attending to further finalising the Amended Defence due to new orders and all matters incidental thereto. According to his time sheet, Mr Newell attended the directions hearing and then spent three hours at the Law Society library researching precedents regarding "pleading defamation and malicious falsehood - consider English authorities on burden of proof re damage to employment prospects in malicious falsehood" and scanning research extracts.
According to his timesheet, on 15 August 2019 Mr Muriniti spent a further eight hours attending to a finalising the Amended Defence and discussing the amendments with Mr Newell. The Defendants attended to executing their verifying affidavits. Mr Newell's timesheet records that he spent four hours drafting Ms Eppinga's cross-claim; two hours amending the proposed Amended Defence; 90 minutes considering Mr Muriniti's email regarding the proposed edits and further drafting, and an hour considering Mr Muriniti's edits to the proposed Amended Cross-Claim and further drafting, spending 8.5 hours in total on that day.
According to his timesheets, on 3 September 2019 Mr Newell spent four hours considering the Plaintiffs' objections to the proposed Amended Defence and prepared submissions in response.

Deficiencies in the First Proposed Amended Defence Exposed by the 5 September Hearing

On 5 September 2019, I heard the Defendants' application for leave to file the Amended Defences. I did not grant leave, but provided the Defendants, with the benefit of the debate that had occurred, with another opportunity to attempt an Amended Defence.
Relevantly Mr Newell and Mr Muriniti had had the benefit of reading the Plaintiffs' written submissions dated 29 August 2019 setting out the Plaintiffs' objections in terms, had prepared submissions in response, and had an opportunity to consider at length whether they would accept the objections.
The Defendants at that time sought to rely upon 28 particulars in support of an allegation of the truth of imputation A; that the First Plaintiff, a veterinary doctor was not worthy of being registered as a veterinary doctor.
The Plaintiffs objected as the particulars did not address to what extent the conduct was attributed to the First Plaintiff. Mr Newell sought to defend the particulars saying it was "a complaint about the system observed in the surgery." The particulars did not say so. Mr Newell also submitted, "There's two things. I would concede that that could be clearer, your Honour but that's not in the submissions that we're obviously going to make." Ultimately Mr Newell conceded that in respect of at least the first 12 particulars the actions of the First Plaintiff needed to be stated.
The Plaintiffs also complained that so far as observations were pleaded, they needed to be pleaded as the fact. There was further objection on the basis that many particulars could not support the truth of the imputation. Complaint was made regarding applications, refusals or decisions regarding the First Plaintiff's registration at an earlier time in the United States, that the underlying facts had not been pleaded.
Mr Newell sought to defend the pleading on the basis that there had been no contest to the past allegations. Mr Newell conceded that there may be a "lack of precision" in the pleading and that it was possible for further particulars of the content of the registration decisions to be provided. He accepted that this was so in respect of other particulars and that "declinatures for reinstatement could benefit from a statement of the content of that decision."
The objections were upheld and Mr Newell was given an opportunity to re-plead with respect to the justification of imputation A.
Imputations B, C, D, E and F repeated particulars 1 to 28. The rulings made regarding Imputation A were also made regarding imputations B, C, D, E and F.
The objection to particulars of truth to imputation I, was in a different category. The imputation was that "the First Plaintiff, a veterinary doctor lied to the police", an allegation of criminal conduct by the First Plaintiff.
The particulars that, "the First Plaintiff made or was knowingly involved in making a report to the police" were not sufficiently particular. Mr Newell submitted that he did not know what the Plaintiff had done in respect of the police report and that he did not have a copy of the report. He sought to justify the lack of particularity by stating that they would issue a subpoena in due course when issues are joined, but that it was a matter peculiarly within the knowledge of the first plaintiff and the "sting is essentially the same". I did not uphold that objection.
Particulars of truth regarding imputations J and K also relied on the same 28 particulars. Many of those particulars did not support the particular imputation.
Mr Newell sought defend the pleading (where he had already accepted that he needed to recast particulars 1 to 28) by submitting that the imputation did not state what kind of criminal prosecutions were in contemplation and that, "the answer, just by way of justification, is to include the notion of animal cruelty by reference to the totality of the practices in that practice, so it's not up to me to specify the criminal conduct involved because the imputation is vague in itself."
However, Imputation J did not assert criminality. It was that "The First Plaintiff, a veterinary doctor deserved to have the hospital closed" and as such I did not understand Mr Newell's submission. In any event, given the concession that the particulars needed to be recast in any event, the matter rested there.
So far as the proposed pleading included a defence of honest opinion, it was confusing in its structure and at times was mingled with the defence of qualified privilege.
The Plaintiffs' complaint was that the defence required a plea of: the expression of opinion and the facts, matters and circumstances said to support it; that the opinion related to a matter of public interest; and substantial truth and/or qualified privilege, and that this was either not pleaded or was pleaded in a way was not readily comprehensible.
I offered Mr Newell an opportunity to re-plead it.
Mr Newell sought to defend the pleading by saying that it was "a defence of honest opinion, its 5A is conventionally pleaded and then following that is only particulars. Now, on the basis of opinion, there are particulars of qualified privilege."
I asked him where the facts for the basis of the opinion were pleaded. He said it was all of the particulars of truth and/or in the alternative, qualified privilege.
Mr Newell said that the confusion in the document arose only by reason of what had been struck out. Mr Newell explained the pleading saying, "You'll see the heading on p [7] which are, your Honour, particulars of qualified privilege but then under it you have A, B and C being those particulars" and that the "basis of opinion includes either truth or qualified privilege so we provided particulars of both. The basis of the opinion can be that it was expressed on that occasion of qualified privilege or, it's a matter of the facts relied upon in the publication are a matter of substantive truth."
Mr Newell accepted that he was required to set forth the basis of the opinion, the factual basis of the opinion expressed, and said that this could be found on page 8 "where there is found a statement that each of the following facts set forth in the matter complained of is true. Then there's a paragraph that repeats particulars, the facts earlier particularised as a matter of the justification of the particulars. It appears at the middle of p 8, the factual justification."
As is obvious from the foregoing and from the transcript, Mr Newell accepted that the document had become "cumbersome". However he said that, "The particulars, the matters said to be true, the facts said to be true appear in the middle of p 8 following the preamble, each of the following facts set forth in the matter complained of is true".
Mr Newell went on to explain, "The particulars following the actual pleading there follows particulars, both under the heading, basis of opinion, because there are two authorised bases for the opinion. The first is substantial truth and the second is indication of qualified privilege. Particulars of qualified privilege are provided, followed immediately by particulars of which facts set forth in the matter complained of are true."
Mr Newell submitted that where it is asserted that the opinions are based on proper material that was substantially true in 5A(c), it would be necessary to read that together with what was found in the middle of p 8.
Mr Newell explained "that perhaps what seems to have happened is that heading has been it's infelicitous that heading has been struck through and does not appear above the statement, each of the following facts; it would be clearer if it were."
I allowed him to re-plead.
The Plaintiffs objected to the matters set out in paragraph 9 of their written submissions.
Mr Newell defended the pleading by saying it was "entirely conventional" and that "it follows the line of the forms and precedents of pleading as published". He submitted that "there are sufficient facts in the statement of claim to make it entirely clear and simply not a closed question, how there could be a social and moral duty in the circumstances of the case. Adequate particulars are provided of the public interest."
Mr Goldsmith argued that it suffered from the same deficiencies that had already been dealt with particularly in relation to the proposed defence of honest opinion.
At that point, given the rulings that had been made, Mr Goldsmith submitted that he was content to address in respect of all of the other objections, unless Mr Newell did not wish him to do so (where he could redraft the Defence in accordance with the rulings that had already been made). Mr Newell wished for the latter course to be taken. Mr Newell said, "there's nothing to be gained by arguing when I could put the particulars in when I re-plead, so I will put them in." That is an important matter, as Mr Newell later complained, contrary to his earlier submission, that objections, that ought to have been taken earlier by Mr Goldsmith, were not taken.
Given the large number of objections that I had upheld, I gave Mr Newell leave generally to re-plead.
Having spent a significant period of time on the issue, I accepted Mr Goldsmith's submission at that time that it should not be necessary to spend an inordinate amount of time trying to make sense of a pleading, which ought to be entirely clear on its face. This pleading was not. In my view, the proposed Amended Defence was entirely deficient.
Mr Newell sought and obtained 14 days to attempt another draft proposed Amended Defence and Cross-claim.

The Defendants Attempt a Second and Third Proposed Amended Defence

According to timesheets, neither Mr Newell nor Mr Muriniti returned to the task of redrafting the Amended Defence within the 14 day period allowed by the Court and the proposed Amended Defence was not served within time, in breach of the Court's orders.
On 19 September 2019, the day the pleading was due to be served, Mr Muriniti spent a further eight hours liaising with Mr Newell and finalising the Amended Defence. He records "perusing Amended Defence and editing same and all matters incidental thereto".
According to his timesheet, on 20 September 2019 Mr Muriniti spent a further eight hours attending to finalising the proposed amended Defence and liaising with Mr Newell to complete it and other matters.
According to his timesheet, on 25 September 2019 Mr Muriniti spent a further five hours attending to a number of matters including liaising with Mr Newell to finalise objections. Mr Newell makes no reference to this and records only that he spent 30 minutes perusing the transcript of the proceedings before Gibson DCJ.
According to his timesheets, on 28 September 2019 Mr Newell spent an hour considering the Plaintiffs' submissions and objections.
According to his timesheet, on 29 September 2019 Mr Newell spent five hours considering the Plaintiffs' submissions and drafting "revised particulars of imputations with standards".
According to his timesheet, on 30 September 2019 Mr Newell spent three hours and 45 minutes redrafting the proposed Amended Defence.
According to his timesheet, on 1 October 2019 Mr Newell spent three hours redrafting the proposed Amended Defence and three hours further researching the defence of honest opinion.
According to his timesheet, on 2 October 2019 Mr Muriniti spent a further eight hours attending to a number of matters including the perusing and amending of the revised Amended Defence, preparing a certificate in compliance with Order 4 of 22 August 2019, perusing the affidavit or Bronte Sellars regarding the amended Defence and "all matters incidental thereto". Mr Newell's timesheet records that he spent five hours drafting the proposed Amended Defence and other matters.
According to his timesheet on 3 October 2019 Mr Newell attended Court and spent an hour preparing the argument regarding the proposed Amended Defence.
According to his timesheet, on 8 October 2019 Mr Newell spent 10 minutes considering an email from Mr Muriniti regarding the proposed Amended Defence.
According to his timesheet, on 11 October 2019 Mr Newell spent two and a half hours preparing for the Court hearing, reviewing pleadings and submissions.
According to his timesheet, on 11 November 2019 Mr Newell spent five hours considering the pleadings and previous submissions of the Plaintiffs. He spent a further two and a half hours drafting submissions on the proposed Amended Defence.
According to his timesheet, on 13 November 2019 Mr Newell spent two and a half hours preparing for the Court hearing, reviewing pleadings and submissions.
According to his timesheet, on 24 and 25 November 2019 Mr Newell spent six hours preparing for the Court hearing.
On 25 November 2019 the matter was adjourned until 4 December 2019.

The Hearing on 4 December 2019 - Objections to the Fourth Proposed Amended Defence.

According to his timesheet, on 4 December 2019 Mr Newell spent three hours preparing for the Court hearing that day. He again appeared for the Defendants.
At the hearing, Mr Newell sought leave on behalf of the Defendants to file the fourth proposed Amended Defence and did not accept that it could not be maintained
Mr Newell wished to withdraw an admission regarding publication but admitted that the First Defendant had "published something to that effect." That was not clear from the proposed new paragraph. In any event, it was explained to Mr Newell that an admission of publication of "something to that effect" was not an appropriate way to respond in Defamation to written material, given the issues of meanings of imputations which necessarily arise.
That conclusion would in my view have been apparent to any practitioner who practiced in Defamation, or indeed to any practitioner properly prepared to argue the point.
Mr Newell submitted that the First Defendant could not distinguish which particular page of Facebook the matter was published to. Because, as I understood the argument, she may have published similar material on two different web pages.
However, the Plaintiff had already provided the URL address of the alleged publication, explaining precisely where it was published. The First Defendant had also been informed that the publication was on her Facebook page with a particular entry for 25 January at 4.53am.
Having sought to withdraw the admission of publication Mr Newell then accepted that the First Defendant could possibly look at the contents and decide whether or not she admits or does not admit publication and that there "may be an inquiry that will lead to recognition that that's her Facebook page". He said he did not know if the Facebook page looks the same. I found Mr Newell's submissions regarding the URL incomprehensible and clearly showed that he had not prepared this issue. He said, "We don't know. What your Honour has identified - but this hasn't been put to us by the Plaintiffs - is that that URL might have been a means of identification which wasn't…it seems obvious, but the instructions were, looking at that document and looking at everything she has published, she could not identify which of several publications that represented."
The new pleading contained contradictory allegations. For example it stated that the Defendants do not know and cannot admit that the First Plaintiff controlled and managed the veterinary hospital, followed by an assertion that this was so. This issue had been raised by Mr Goldsmith in submissions filed on 19 November 2019. Mr Newell accepted that the pleading was contradictory.
The pleading used terms that were not capable of precise definition. For example, it referred to the First Plaintiff as a "registered superintendent". Mr Newell defended the use of the term as he said that the First Plaintiff was registered under "the legislation, the hospital's legislation" as a "superintendent". He said, "That hospital is registered as a hospital, under the relevant legislation. It has accreditation, legislated accreditation." When I enquired what particular legislation Mr Newell was referring to, he said, "Under that Act." I again asked what Act? He responded, "Well, it's pleaded which one it is, in Mr Goldsmith's Statement of Claim. It's a hospital licence by the Veterinary Practitioners Board. So [Mr Goldsmith is] not as confused as he suggests." I asked Mr Newell to resist making those kinds of statements about his opponent. Mr Newell pointed me to what he said was paragraph 5(b) of the Statement of Claim where he said it was pleaded that the hospital in question was licensed by the Veterinary Practitioners Board. There was no reference there to any legislation. Indeed the page Mr Newell took me to had no paragraph 5(b). Mr Newell apologised for his mistake. He then submitted "But it's pleaded, what the registration is about. It's a registration, it's a licensing under the Veterinary - under the auspices". I found Mr Newell's submissions to be incomprehensible, and I again asked what Act he was referring to.
At that point Mr Goldsmith intervened to assist. I was receiving almost no assistance from Mr Newell on the issue. Indeed there was no reference in the Statement of Claim to any legislation simply that the First Plaintiff was a veterinary practitioner.
Again, I asked Mr Newell what particular Act referred to the term "registered superintendent". Mr Newell said he could not remember. I informed him if he relied on a particular defined term from legislation, then this needed to be pleaded. He then said, "Well, delegated legislation", suggesting that he did perhaps remember. I did not otherwise understand the submission.
It was apparent not only that Mr Newell was unprepared but also that this lack of preparedness was unduly wasting the Court's time.
The next objection related to what Mr Newell described as a typographical error, but which nominated the wrong party and which Mr Newell accepted, contrary to his written submissions, needed to be corrected.
The next objection, and one which permeated the pleading more generally, related to conclusions about items in the Plaintiffs' veterinary clinic being "dirty" or "filthy" items without any reference to the appropriate breach of standards or obligations as particularised. Mr Newell accepted, contrary to his written submissions, that it needed to be amended.
The next objection related to the broad sweeping statement relating to a "failure to maintain professional standards to the standards expected by other veterinary practitioners", with no particularisation of the standards expected by other veterinary practitioners. I asked Mr Newell to clarify what standard was required. The following exchange took place between Mr Newell and myself: NEWELL: The standards relate to sanitary conditions, your Honour. HER HONOUR: No, factually, what is the standard that's required in respect of this? NEWELL: The cloths HER HONOUR: A new cloth each time, a cleaned cloth for each cage? NEWELL: A new cloth at the beginning of the day. HER HONOUR: Right. If one is cleaning out NEWELL: The cloths HER HONOUR: Just wait a minute, let me finish the sentence and I'll let you finish yours. If it starts out as a perfectly clean cloth and someone is asked to clean a number of cages, is that satisfaction of the standard? NEWELL: Well, no - yes and no. If it starts out as a clean cloth, that's a very good move. Once the cloth becomes dirty, it can't be used for cleaning in a sanitary way, and then you have to have another clean cloth. So what she's saying is, "I was handed a dirty cloth with the expectation I would clean with it." That, as a matter of common sense, tells the Plaintiff that the Plaintiff doesn't know how to answer the case. But if the Plaintiff wants to say, as an example, "That doesn't mean anything, because that is what is always done," or what the particular circumstances were, the Plaintiff can say that. What I pointed out in my submissions is that the question of the adequacy of particulars really depends - and I refer to Rush in this regard - on the particular allegation and the particular circumstances of the case. …. "This assertion is an assertion made in a context where in these particular circumstances the publication complained about was made immediately after these events at which a filthy cloth was handed to the First Defendant. The Plaintiff has got no difficulty in saying, "I know what happened, I gave her a cloth that might have been somewhat dirty. That is what in fact occurred." That's not a problem. The problem is it's a filthy cloth - I don't know that we can go further than filthy - and in a context where there was an expectation to use it to achieve cleanliness.
What followed was a long interchange about the need to be precise in the particulars. Ultimately Mr Newell said that he did not have any difficulty amplifying the particular.
The next objection related to the failure to link the allegations with the breach of any standard. Mr Newell said that he had done this "implication" in "the introduction". He submitted, "The introduction to the pleading says - this is all about standards - each particular, and then the particulars of the standards that the overarching pleading refers to are included under each particular - the introduction." I asked him about a particular example, where the link was not clear. Mr Newell submitted, "The link is in the totality of the particulars, which says there's a requirement for the benefit of animals to achieve sanitary conditions." Again after a long exchange, Mr Newell said that he "understood the argument", which I took as an acceptance for the need for clearer particulars.
At that point Mr Newell appeared to go off on a tangent, in dealing with "another issue", of the requirement of a veterinary hospital to maintain sanitary conditions generally. In the course of the exchange Mr Newell recited some facts that were not pleaded, a point which I took up with him. At that point he submitted, "Your Honour, I don't want to waste time with this, because I'm happy to amplify those particulars in the way that your Honour's comments suggest….It can be more explicit.…But we can cut through this by me amplifying those particulars."
At that point Mr Goldsmith observed what I had also observed, that an inordinate amount of time had been spent with the Court trying to work out what was alleged, a matter that was self-evident support for the objection and the need for proper pleas or particulars of facts to enable one to make sense of the allegation. It was in respect of matters that ought to have been very straightforward: to plead the standard and then plead the facts that allegedly give rise to the breach. The deficiency in my view would have been obvious to any reasonably experienced practitioner who had prepared the argument.
The next objection related to the pleading being a recitation of things that the First Defendant had observed, as opposed to them occurring, and Mr Goldsmith submitted that the facts needed to be pleaded rather than the First Defendant's observation of matters. In short it was said to be a pleading of anticipated evidence and not facts.
Mr Newell said, "The way that the Statement of Claim is pleaded and the way the Defence responds, the imputation that conduct - the same facts are alleged from the outset in the Statement of Claim, to be sheeted home in the Statement of Claim itself to both the First and the Second plaintiffs. So this is pleading in response to both, according to the same logic as the Statement of Claim." Another long exchange ensued as I tried to understand the submission. In doing so, Mr Newell took me to various pages in the pleading that purportedly all linked together, in a way that was in my view convoluted and confusing.
Ultimately I upheld the objection regarding observations being pleaded, as opposed to facts.
The next objection related to a lack of particulars regarding a cat that was said simply to be in distress, and accordingly there was no ability by what was pleaded to determine whether there had been any breach of standards. After another lengthy exchange, I explained to Mr Newell that, "A simple observation at an unknown point in time for an unknown duration in my view would not link to breach." At that point, Mr Newell submitted, "A more important fact would be to be more explicit about how the described conditions are linked, as a matter of probability, to the observed behaviour. I thought that that was done, but it may be it ought to be more explicit." I upheld the objection.
The next objection related to an alleged breach of professional standards, which in turn, in Mr Goldsmith's submission, incorporated the Veterinary Practice Regulation 2013. The Regulation covers a very broad range of expectations and obligations which had not been particularised. Mr Newell accepted that the particular breaches need to be pleaded with reference to the standards set out in the Regulation. I upheld the objection.
A number of other objections were upheld, following my earlier rulings. Contrary to his written submissions, Mr Newell agreed to re-plead on a number of occasions.
Indeed there came a point in the debate where I suggested that if Mr Newell was to re-plead, he might give consideration to prepare a pleading that did not, as this one did, require the Court and Mr Goldsmith to refer to definitions that in turn referred the reader to somewhere else, quite separate in the pleading. The pleading was, in a number of respects very difficult to comprehend. In other respects the allegations were accepted to be unclear. Other paragraphs were apparently inconsistent with each other, causing confusion. In short, the hearing before me ultimately became a drafting class in respect of a highly deficient pleading.
It became apparent that the objections to paragraphs 14 to 19 had similar objections. At that time, the following exchange occurred: HER HONOUR: Mr Newell, do we need to go chapter and verse through 14 to 19, or will you take on board what has flowed from the debate so far in respect of those paragraphs? NEWELL: The difficulty with the matter is that I don't know - my submission has been that many of the complaints that have led on the last occasion and this occasion have not been systematically made through the complaints about the pleadings. So there seems to be a movable feast about what the complaint is. I'm concerned if we don't go through them…"
This required each objection, whether or not they had the same basis for objection, to be separately addressed for the benefit of Mr Newell. From that point in time, each of the paragraphs objected to, required a further lengthy exchange to explain to Mr Newell what was wrong with the pleading and I upheld the objections, with Mr Newell at times agreeing with the need to re-plead that particular paragraph.
At one point Mr Newell, initially sought to support the inclusion of some seemingly irrelevant material about the First Defendant's state of mind, which I described as being somewhat paranoid. That is, that if the First Defendant "showed her anxiety, then the two Plaintiffs got a signal that she had a concern about the standards, that she was going to express an opinion about either there or elsewhere." He described it as something that "underlies" the pleading, that there was an "intention to conceal those standards, not to adhere to them". Mr Newell accepted that this more serious allegation was not pleaded.
Mr Newell accepted that other paragraphs could be improved and would be "amalgamated so as to make it crystal clear." I upheld the objection.
There was a wholesale objection to paragraphs 26 to 33 and including an addendum, based on the fact that the first incident alleged in support of the defence of justification dated back to 1973 and was not clear. It referred to a finding against the First Plaintiff in "broadly similar circumstances", without stating what they were.
Mr Newell had not been able to find the decision that he referred to in the pleading. He explained that he knew they were broadly similar because "It was a subsequent - it was stated somewhere, it was reported somewhere that that's what the judge said." I interpreted that submission to mean that in 1976 it was reported what was said in 1973 and that it appeared to be something "broadly similar to misleading representations about surgery".
I enquired of Mr Newell as to how, without the details of the 1973 matter, he was going to prove that matter. He said, "I think we have to subpoena the Veterinary Surgeons Disciplinary Tribunal for a copy of that decision" and as such would prove the findings. He said, "There would have to be reasons. It couldn't happen without reasons." Mr Newell explained that he had not issued a subpoena to produce the relevant documents because the Plaintiffs had objected to the subpoena being issued prior to the pleadings closing.
I enquired of Mr Newell how the Plaintiffs could respond to a pleading that says something to the effect that in 1973 the First Plaintiff was suspended for reasons described in the 1976 judgment, which in turn says only that the "circumstances are broadly similar". I asked Mr Newell whether he expected in respect of the 1976 decision to be able to prove those foundation facts other than through the judgment. He said that he did not. He said that he proposed to use s19 of the Defamation Act to tender the evidence of convictions. I pressed him on whether he was intending to prove the underlying facts, or just the fact of a conviction. Mr Newell responded "I have to consider that. I have to consider that. I've assumed that the specific provision of the Defamation Act would have covered that."
Section 19 of the Defamation Act refers to the inadmissibility of evidence in respect of offers of amends. It became apparent that Mr Newell was referring not to s.19 but to s.42 of the Defamation Act, which provides that if the question whether or not a person committed an offence is in question in Defamation proceedings, proof of the conviction of the offence by an Australian Court is conclusive evidence that the person committed the offence, and proof that the person was convicted of the offence by a court of any country (other than an Australian court) is evidence that the person committed the offence. Importantly, the contents of a document that is evidence of conviction of an offence, and the contents of an information, complaint, indictment, charge sheet or similar document on which a person is convicted of an offence, are admissible in evidence to identify the facts upon which the conviction is based.
I raised with Mr Newell the fact that the matter went to the Court of Appeal and that the facts were contested. Mr Goldsmith also pointed out the fact that the word "conviction" clearly denotes a criminal offence and that the provision likely had no application here. Mr Newell was not aware of any similar provision relating to disciplinary matters. He did not accept that s. 42 did not cover disciplinary matters. He said that he simply did not know.
Returning to the particulars, Mr Newell described the conduct in 1973 and 1976 as "a continuity that is so compelling that there's a presumption of continuous, almost, in this course of conduct from 1973 through to the 90s in California." I did not understand the submission.
At that point Mr Newell suggested that, "A Freedom of Information Act can be made to the Vet Board - it doesn't have to be a subpoena - for the particular decision, and then will be possible to particularise it." There was no explanation put forward as to why this had not already been done and Mr Newell appeared to have thought of that matter as he spoke, particularly where he had, only moments before, proffered the idea of issuing a subpoena. Mr Newell also submitted that the matter could be proven by cross examination, so that it did not follow that because the document could not be tendered, it was not relevant to the giving of the particulars.
I held that the pleading was currently deficient for want of particulars, but as there might be some particulars that could be forthcoming, I declined to allow the wholesale rejection of the paragraphs based on the lack of admissible evidence at this stage to support it or by reason of the antiquity of the conduct, given that it is said to have occurred over a number of years, albeit many years before. I held that all allegations of negative findings by particular boards and any convictions required further particulars.
A number of particulars did not support the pleaded proof of truth of the imputation. Mr Newell almost immediately accepted that there were some particulars that don't go to that particular imputation. I upheld the objection.
I did not uphold one of Mr Goldsmith's objections regarding attempted force.
So far as the defence of honest opinion was concerned, Mr Goldsmith submitted that it involved some of the same issues that he had had with the second proposed Amended Defence. He submitted, and I accept, that it was confusing and seemed to suggest a defence of honest opinion, but it was not pleaded.
The statements about opinion did not clarify which parts were said to be fact, and what was said to be opinion, where clearly there were some matters that were not opinions. Mr Newell said that it was "very clearly" a defence of honest opinion. He said, it pleads that it's an opinion and it's honest. He accepted that there were however parts of the first matter complained of that do not express opinions. He did not accept that particulars ought to identify the opinions relied on. He said that it was "contrary to authority and contrary to principle". He explained that, "there's a complex contextual analysis as to what amounts to opinion and what amounts to facts, in the deconstruction of the matter published." He relied on Aga Khan v Times Publishing (as had been exposed in his written submissions of 2 October 2019). Mr Newell went on to explain that, "The matters that are the subject of opinion are pleaded in a sense, because it's only restricted to certain imputations and the material underlying those four imputations. Not all of the imputations are said to be expressions of opinion." He submitted that he was not required to provide particulars of those parts of the first matter complained of that provide the expression of opinion. He submitted that "the matter complained of, in so far as it informed four separate imputations, was an expression of opinion, not the other imputations." He submitted that imputations (a), (d), (j) and (k), "which are the driving matter", are, in so far as they are conveyed by the underlying material, are "questions of opinion". He said that the "authorities are unanimous or consistent that what happens with the question of honest opinion is a difficult, and in any event contextual analysis, based on proper analysis."
I asked Mr Newell if the Statement of Claim particularised those parts of the first matter complained of that made up the imputations (a), (d), (j) and (k) respectively. He responded, "Usually it's the matter as a whole. Most of the particulars rely on something plus the matter as a whole, so that's not particularly helpful. But in any event, the Defendants would be entitled to justify the publication based on honest opinion whether or not the Plaintiff had the same opinion about what was the opinion and what was the factual premise for the opinion." I asked again whether there was any articulation in the Statement of Claim of those parts of the matter complained of that made up the alleged imputations. Mr Newell responded, "Not one that's useful for this purpose, because usually … they almost all". I asked for a third time. Mr Newell did not respond. Mr Goldsmith helpfully intervened and pointed me to the line numbering set out in paragraph 4 of the statement of claim. Again this illustrated either a lack of understanding or preparation, or both, on the part of Mr Newell.
Mr Goldsmith accepted that so far as the expression of opinion is concerned, it is not incumbent upon a pleader to set out those matters that are matters of fact and those matters that are expressions of opinion.
I asked Mr Newell whether the pleading should articulate, so far as they are expressions of fact, they are true or based on reasonable material or whatever it was that the pleader wished to assert about it. He said that this had been done. He also accepted that it ought to state, so far as they are opinions, that they were matters of public interest and based on proper material.
I asked him to point to that part of his proposed Amended Defence that did that. He replied, "It's a pleading of what matters are said to be true for the purpose of substantial truth." I then directed him to his defence of honest opinion. He responded "That's what I mean, I'm sorry. One of the matters that has to be pleaded in support of honest opinion is the substantial truth of the facts in the publication." He said that I would find that pleaded at page 18 of the proposed Amended Defence. They were located some pages over, after qualified privilege had been pleaded.
Mr Newell explained, "The way it has been pleaded, there are lot of necessary particulars, because it's pleaded - there's two alternative ways of establishing honest opinion and one is qualified privilege, the other is substantial truth. So we have particularised both, your Honour."
It was not immediately clear to me or to Mr Goldsmith just what the was being said about those matters which are fact and which are said to be true, but it appeared to be found in pages 18, 19 and 20 of the document. It contained an articulation of facts that are said to be true (subject to providing proper particulars about them). It also appeared that so far as the words that are alleged to be expressions of opinion, they are the same words that are said to contain the matters that support the imputations (a), (d), (j) and (k) pleaded by by the Plaintiffs, referred to by the line numbers.
At that point I sought clarification from Mr Newell as to whether or not this is what was intended by his pleading. He said, "I don't know that. What I've analysed is that those imputations, on a deconstruction of the first matter complained of, can amount to opinions on a contextual deconstruction of the first matter complained of; that in so far as they conveyed those particular imputations, they conveyed them as opinions. But I don't know what my friend is saying, because every single one of his pleadings, so far as concerns the imputation, says "and the matter as a whole". So I'm not sure what he's asking me to restrict - I don't think I should restrict it, but if I was asked to, I'm not sure what the restriction would be."
Mr Newell agreed that what was being said in the statements that relate to imputations (a), (d), (j) and (k), were expressions of opinion.
Mr Goldsmith then raised his objection about the lack of articulation that the opinion was honestly held. Mr Newell did not accept that he needed to plead that, but said, "This is the conventional pleading, as I understand it. What's pleaded is not that they're honestly held, but the elements that establish that. So it is an opinion in fact, and the facts upon which it is based are actually true, which makes it an honestly held opinion…It would cost me nothing to say that it was an honestly held opinion in that - it would be adding a few words. I don't want to have an argument about it. If there's any ambiguity, let's get rid of it."
Mr Newell justified the position by saying that it was inherent in the pleading that the opinion was held by the Defendants (or one of them). However, the pleading did not say that, merely that it was an "an expression of opinion", by somebody not named.
I upheld the objection and ultimately Mr Newell agreed to plead that it was an expression of opinion in fact held by the First Defendant.
I reject Mr Newell's submission that the pleading of honest opinion was "very clear". To the contrary, I found it to be a disjointed and complex labyrinth of badly articulated concepts, loosely knitted together by cross referencing. It was in my view, illustrative of lack of preparation, inexperience and incompetence in drafting the pleading.
The plea of qualified privilege at common law did not articulate the group of people to whom the publication was made. Further, the pleading articulated why readers may have had an interest in a topic or a subject, rather than in receiving this particular information. It referred back to "the communication". The "communication" was not articulated. Mr Newell explained that it was the first matter complained of. The objection was not pressed in light of the explanation.
The statutory defence of qualified privilege particularised matters that did not relate or evidence the conduct of the First Defendant. I dismissed the objection by reference to the decision in Hockey v. Fairfax Media Publications [2015] FCA 652. However, I required Mr Newell to properly particularise his reference to "registered superintendent" consistent with my earlier decision. Mr Newell described it as a "the statutory mandate". I did not understand the submission.
So far as the "Particulars of Materials Which are Substantially True", there were rejections which flowed from the rulings that had been made.
Overall, I dismissed the Defendants' application for leave to file the proposed Amended Defence and granted leave to the Defendants to attempt a further proposed Amended Defence, which was the fifth proposed amendment.
Mr Newell sought three weeks to prepare another pleading, which I allowed. Accordingly the next proposed Amended Defence was due on 17 December 2019.

Preparation for the Fifth Proposed Amended Defence

According to his timesheet, on 5 December 2019 Mr Muriniti assisted Mr Newell during the "amended Defence hearing".
According to his timesheet, on 13 December 2019 Mr Newell spent one hour conducting further legal research regarding honest opinion.
The fifth proposed Amended Defence was not served on 17 December 2019, again in breach of the Court's orders.
According to his timesheet, on 10 March 2020 Mr Newell spent one hour preparing a "working schedule for further details of particulars of justification".
According to his timesheet, on 12 March 2020 Mr Muriniti discussed the preparation of the further proposed Amended Defence and obtained instructions to prepare a fifth proposed Amended Defence, to be "available shortly". Mr Newell recorded that he spent two hours "considering transcript and updating schedule of particulars".
According to his timesheet, on 13 March 2020 Mr Muriniti spent a further six hours liaising with Mr Newell in preparation for the hearing relating to the proposed Amended Defence and other matters. Mr Newell recorded that he spent three hours undertaking "detailed consideration of transcript on 11 December against statement of claim and existing iteration" of the proposed Amended Defence.
According to his timesheet, on 16 March 2020 Mr Muriniti spent a further five hours perusing an email from Mr Goldsmith regarding the Amended Defence and other matters.
According to his timesheet, on 17 and 18 March 2020, Mr Newell spent 16 hours drafting the proposed Amended Defence.
According to his timesheet, on 18 March 2020 Mr Muriniti spent a further eight hours reviewing the fifth proposed Amended Defence and discussing it with Mr Newell, further editing the Amended defence and "all matters incidental thereto".
According to his timesheet, on 18 March 2020 Mr Muriniti served the fifth proposed Amended Defence, some three months after it was due.

The Position Taken By Mr Newell in Submissions in the Course of the Personal Costs Application Regarding the Proposed Pleadings

In defending the application for costs, Mr Newell sought to reargue the validity of his earlier pleadings, which had been rejected. Mr Newell said, contrary to findings that I had made, that the pleading regarding honest opinion was "always in order" and said that, "The fact that [he had] made the change is not an argument against that." He said, "I've made the change to say the opinions were in fact held by the Defendants, but that is not according to customary pleadings required. That's implicit, and it was never the case that a legitimate complaint of that kind should have been made." He ignored in the submission, the other numerous deficiencies, which he had earlier accepted.
Mr Newell asserted, at times contrary to his prior position and contrary to my rulings, that, "There were a lot of complaints about the pleading that were unmeritorious, and the pleadings were based - those matters principally that could be described as successful - because of the ultimate outcome, related to the factual particulars of justification and a deconstruction of them, and what was contended was needed for those changed."
To the extent that I understood the submission, Mr Newell appeared to be contending that he agreed to change the pleading despite it being in good order. I reject that submission for the detailed reasons I have set out in relation to the pleadings.
When challenged about there being four attempts at a Defence, and a proposal to plead a fifth, Mr Newell relied on the fact that only two were put before the Court for argument, " Because, that's what occupied the time." Mr Newell did not appear to appreciate the basic proposition that what also occupied the time was Mr Goldsmith having to look at four proposed Defences, and that what was sought was the professional costs arising from the four proposed defences that Mr Goldsmith did not need to review.
I regarded Mr Newell's submissions on this issue to be obviously without merit. It was not clear to me whether the submission was a result of incompetence or guile, but given his similar experience in the De Costi litigation, regarding both filed and unfiled pleadings, I regarded the last mentioned submission as disingenuous.

The Position Taken By Mr Muriniti Regarding the Proposed Pleadings in the Course of the Personal Costs Application

Mr Murinti accepted that the first Amended Defence was "problematic" and that in response to the "concerns" in subsequent iterations he had attempted to address them. He complained that Mr Goldsmith kept moving the goal post, by raising further objections that had not been raised previously. Mr Muriniti did not accept that objections could only be raised to matters specifically pleaded.
Mr Muriniti was taken to the chronology of proposed amendments: the Defence was not pressed, the next was struck out, the next two were not pressed, the next was also struck out and the latest was in contemplation, where the Plaintiffs sought some changes, and was asked about responsibility for those pleadings. He responded "We have to take responsibility for the work we produce. However, as you know, the situation isn't as simple as that summary would seek to make it. For example, we readily conceded that the first document we produced required amendment. Then there were a series of the matters that you raised concerning particulars and so on which we tried to address. You subsequently raised new matters that arose - that you hadn't raised before and we tried to address those and they had to do with particulars and all sorts of things. So we've done the best we can. We haven't professed an expertise in Defamation but neither have we said we are incompetent practitioners. We are doing the best we can."
Mr Muriniti said that in this case he left it to Mr Newell to prepare the draft Defences. I did not accept that evidence, given what is set out in the timesheets. I have accepted them to be accurate, given that, despite my grave concerns about them, no one suggested them to be false.
Mr Muriniti accepted that neither he nor Mr Newell is an experienced Defamation lawyer and agreed that there may have been some deficiencies. He did not accept "gross negligence or gross incompetence". He admitted that both he and Mr Newell had minimal experience in Defamation, and that but for this case he would not ordinarily go looking for Defamation work, but that he took the Defendants on, on a "compassionate basis".
The following exchange took place: HER HONOUR: Q. I'm just wondering why you wouldn't encourage them to take access to the pro bono scheme and get a qualified, experienced defamation lawyer to at least draft the pleadings, given the problems that there have been with the pleadings? A. It's a fair question, your Honour, which I might with respect answer a little guardedly. That is something that has been touched on and that I have informed my clients about and they have made a decision about that. Your Honour will forgive me if I don't go any further than that. But I - what I can indicate to your Honour is that the matter you've addressed, it's obviously exercising your mind has also exercised my mind and I have attempted to deal with it as properly and as thoroughly as I can.
Mr Murinti said that without him, the Defendants in question would have been left without legal representation and that he knew this. He did not wish to elaborate and claimed his client's privilege.
Mr Muriniti hinted that the Defendants had not been able to obtain such assistance, he said "What I can tell you is that the so-called schemes of our..(not transcribable)..assistance are not as readily available as people might think."…"I am aware that that is something which is promulgated within the profession and that there may be, from time to time, barristers - experienced barristers who might be prepared to consider taking on a matter. It does not go without saying that they will be - they will jump at the opportunity. Now, as I understand it, it's not as easy as you would make it - as you would make it appear."
Having given that answer I pressed Mr Muriniti, as I had understood that the Defendants, far from not being able to access the scheme, had no wish for it. I find that Mr Muriniti's evidence is contrary to the Defendants' evidence about not wishing to make any other enquiries about assistance in representation.
Mr Muriniti said that, "I am aware that at least one of these ladies made an approach and found it most unsatisfactory." He said that this was not in her affidavit as a result of anxiety about inadvertently waiving privilege. I asked Mr Muriniti how that could be so, for the Defendant to simply say, "I did seek it and wasn't satisfied." Mr Muriniti responded, "I am prepared to concede that in retrospect I could have gone a little bit further. I just don't know. When one is dealing with questions of confidential communications, there is always the risk of, "Oops, you've now waived it."
Where that left Mr Muriniti's evidence, that without him the Defendants would be left without representation, is not clear. I did not accept it.
So far as Mr Muriniti's obligation to the Court and to his opponent in preparation of the pleading is concerned, he did not accept that he had been indifferent. He said, "I have endeavoured to help these ladies and they are fully cognisant of the fact that we have limited experience. I have endeavoured to help them. They've asked for my help. They continue to ask for my help. It would be - I would find it morally reprehensible to show them the door when they continue to ask for my help."
Mr Muriniti did not address his obligation to the Court or to his opponent and I regarded his answers to be somewhat unresponsive on that issue.
Mr Muriniti has taken no steps to contact any Defamation barrister for assistance. It was suggested to him, that if he had really wanted to help the Defendants in their best interests, he would have, at least after the Defence was struck out, and after the challenge to the first Amended Defence and when it was becoming very self-evident that Mr Newell was struggling to prepare a properly formulated defence, to do so. Mr Muriniti's response was to rely on the privilege and to hint that there may have been discussions to this effect.
Given the absolute trust that the Defendants have in Mr Muriniti and Mr Newell, I have absolutely no doubt that if Mr Newell and Mr Muriniti had recommended getting a Defamation barrister to assist on a pro bono basis, or otherwise, they would have.
Mr Muriniti explained his position as follows: "Mr Newell and I believe that from time to time in so far as we're able to afford it and as far as we can, we will provide members - vulnerable members of the community with the benefit of legal representation if they seek it and if they chose not to go elsewhere in the event that they are advised that there may be people out there who - with broader experience in a particular area. So, to answer your question, no. We don't go around doing the sorts of things you - you - you - you're suggesting, but we are prepared to - to assist the - the vulnerable and the weak, and that is what we do, sir."
Dissatisfied with his answers to that point, I attempted to explore with Mr Muriniti the notion, that the principle as he had enunciated it in those emphatic terms, might conflict at times with his obligations to the Court to conduct litigation as efficiently as one can. That is to say an inexperienced Defamation lawyer whilst wanting to do the best by a client is not necessarily fulfilling his obligations to the Court. Mr Muriniti accepted that this might be a possibility, but that had not occurred in this case.
Mr Muriniti said that they were endeavouring to address the matters raised and sought to address them in the second iteration of the Defence, but that Mr Goldsmith had raised new issues on the next occasion, which again they endeavoured to address. He described the complaints as a "moveable feast".
Mr Muriniti again said that the Defendants had "nowhere else to go", a statement that I do not accept. What is in fact the case is that, whatever was said to both Defendants, by either Mr Muriniti or Mr Newell, and for whatever reason (the reason remaining opaque by the decision to claim privilege over any of those discussions), they had nowhere else they wished to go.
Mr Muriniti said that he was willing to help the Defendants despite the absence of experience and skills in a Defamation case. He rejected the proposition that he did so without regard to the pain and the cost that he had subjected the Plaintiffs to.
I find that Mr Muriniti's approach to the litigation has been in clear breach of his obligations to the Court and to his opponent. Engaging Mr Newell to appear in all matters for the Defendant has resulted in the Defendants being incompetently represented, has resulted in delay in the proceedings, and has resulted in unnecessary costs being incurred by the Plaintiffs. Mr Muriniti's decision to persist in using Mr Newell in those circumstances has been unreasonable and unexplained.
Furthermore, Mr Muriniti had been on notice of this occurring in the past. For example, despite the finding of the Federal Court in Young v Hughes Trueman that the solicitors had not only instituted and maintained a proceedings which had no prospect of success, but have also engaged in something more, being unreasonable conduct in making serious allegations absent a reasonable basis; and also with a disregard of any proper consideration of the prospects of success, Mr Muriniti continued to instruct Mr Newell in this matter. He said that he responded by discussing with Mr Newell what had fallen from the Court and what had been raised against him and sought to address those concerns. He said that it never occurred to him that Mr Newell was simply not up to the task. I regard that statement to be either disingenuous or as a result of intractable thinking.
It is appropriate to refer Mr Newell and Mr Muriniti to the Legal Services Commissioner on this issue to determine whether or not he ought be dealt with for unsatisfactory professional conduct of professional misconduct arising from their clear incompetence in conducting the case to date.

Breach of s 56

For the same reasons, I find that both Mr Muriniti and Mr Newell have breached their obligations under s 56 of the CPA in many respects.
Mr Muriniti said that he was aware of s 56 of the CPA and the overriding purposes that proceedings should be run efficiently, quickly and as inexpensively as possible. He said that he had worked towards achieving those overriding purposes by continuing to place trust and confidence in Mr Newell.
It was suggested to Mr Muriniti that no practitioner reasonably would persevere with Mr Newell given his background particularly in respect of the past personal costs order, to continue to draft pleadings. In short Mr Muriniti said, "I have my reasons which will be ventilated in the appropriate place as to why my confidence in relation to Mr Newell is well placed."
He explained his continued faith in Mr Newell even after the third or fourth iteration of the defence as follows: "I accepted the matter from Ms Eppinga and Ms Milham on the basis that I could keep this matter in-house. It is actually costing me to run this case for them. This is being done on a compassionate basis and obviously I was looking to deal with it in a way that would assist them but would not see me being subjected to - committing a lot more time in briefing counsel, having conferences with counsel - all of those things that come with briefing counsel rather than having the matter in-house at additional considerable expense to me. I would not have taken the matter on, on the basis that I did if I was going to commit or be obliged to commit to that procedure and I told my clients, you know, that we have limited experience in this area of the law. They felt that they could - that getting us was better than nothing. They had gone - as you heard from them, your Honour, they had gone and sought - they'd made approaches to two other people and elected to stay with us, and I was prepared to help them."
Again, Mr Muriniti made no reference to his obligation to the Court or to his opponent as required by s.56 of the CPA.
In particular neither Mr Newell nor Mr Muriniti made enquiries as to whether any barrister experienced in Defamation law would take the case on a contingency basis, even after the third iteration of the Defence had been rejected, and where it must have been obvious that the economies that they were expecting were fast disappearing. He explained it by saying: "By that stage what we were getting - at least what was being conveyed to me is that the complaint had to do with particulars and that the nature of those particulars kept changing. So I understood that those concerns could be addressed by just going out and getting the additional information which Mr Goldsmith claimed he needed by way of particulars. Your Honour, as I understand it, Mr Newell did; he went off, he did what he was required to do. He's produced a fifth iteration which now, according to Mr Goldsmith, he doesn't have a problem with."
I pressed Mr Muriniti that on a review of the transcription, the objections were not just about particulars. He accepted this but said, "I understood those were matters which could be addressed.
Mr Muriniti rejected the notion that by persevering with Mr Newell, who had clearly demonstrated a lack of competence in the preparation of Defamation defences, he had no real prospect of achieving a just, quick and cheap resolution of the matters in dispute. He said in answer to Mr Goldsmith, "We're talking about three iterations and some nominal amount of costs as far as I'm concerned. Relative the costs of the motion you brought, the costs you are talking about, if you had quantified them and come to me and said, "We think these costs have been wasted," I would have given them proper consideration. But instead you launch into this massive motion."
Mr Muriniti disagreed that, by persevering with Mr Newell who clearly does not have the appropriate level of competence, it would never have been realistically achievable for him to satisfy or achieve the primary objectives of section 56 of the CPA.
Mr Muriniti rejected the suggestion that these proceedings are an opportunity for he and Mr Newell to generate significant legal costs irrespective of section 56 of the CPA and the interests of the parties, and that Mr Muriniti's unswerving confidence in Mr Newell is prompted by a commitment and a desire on his part simply to generate a large amount of legal costs.
He said, "Why does Mr Newell still have my confidence? Because we've been on a journey together in trying to uphold the system of justice and do the best we can against vested interests who want to smear us and present us as if we're two-bob watches.
I did not accept Mr Muriniti's explanations. To the extent that he explained his position, he appears to have given absolutely no regard to the a just, quick and cheap resolution of the matters in dispute. The way in which Mr Newell as conducted himself has also been in clear breach of s 56 of the CPA.

Are they Appropriately Admitted as Tendency Evidence?

As a general proposition the actions of Mr Muriniti and Mr Newell, is to be assessed by reference to what occurred in this, and not other, cases.
Indeed, s 91 of the Evidence Act 1995 ("the Act") provides that evidence of the decision, or of a finding of fact, in an Australian proceeding is not admissible to prove the existence of a fact that was in issue in that proceeding.
In King v Muriniti [2018] NSWCA 98, Basten JA, with whom Gleeson JA agreed, concluded that s 91 of the Act is not applicable to the exercise of jurisdiction with respect to the liability of a legal practitioner to pay costs or indemnify a party as to costs under the CPA, s 99.
Basten JA observed, at [44], that: "... if the court is entitled to take account of its findings, to the extent that they are relevant, it would be absurd that it could not have regard to the very judgment in which those findings were expressed. The only contention standing in the way of that approach is the reading of s 91 relied on by the practitioner; however, properly understood, s 91 is not engaged in the present circumstances."
However, these are entirely unrelated proceedings, where Mr Goldsmith sought to rely on a litany of decisions in which Mr Newell and Mr Muriniti have been strongly and often criticised for the same kind of conduct alleged here. He seeks to prove the tendency by reference to the findings of fact made in the decisions and, as such it may have been necessary to determine whether s 91 of the Act is applicable to the unrelated proceedings in this case.
McColl JA observed in Lemoto v Able Technical Pty Ltd & 2 Ors [2005] NSWCA 153 at [147] that : "In determining the application [for a personal costs order against a legal practitioner], the court should be conscious that use of judicial findings in the principal proceedings will only be permitted where the legal practitioner will not suffer an injustice: see Flinn v Flinn (at [4]-[9])."
This is not a case where these findings of fact have been made in the principal decision. It is evidence sought to be admitted in respect of entirely unrelated proceedings. Ironically, I have had regard to King v Muriniti [2018] NSWCA 98 in coming to the conclusion that the evidence ordinarily could not, without consent, be used as tendency evidence in this case.
However, s 190 of the Act provides that the Court may, if the parties consent, by order dispense with the application of any one or more of the provisions of Parts 3.2-3.8, in relation to particular evidence or generally. Section 97 of the Act sits within Part 3.6 of the Act.
In this case, Mr Newell having objected to the tender of the unrelated judgments documents, insisting on cross-examining them back into evidence in questions asked of Mr Goldsmith regarding his motive in bringing the proceedings for personal costs orders. Ordinarily the fact that the evidence is admitted for another purpose might not render it as admissible tendency evidence. However, Mr Newell did not object to the facts as stated being used as tendency evidence. Accordingly, I ordered that the provisions of s 97 of the Act did not apply and the tendency evidence could be used in this case.
Furthermore, given the way in which this case has unfolded, I am satisfied that the use of those decisions has not operated in any unfair way in respect of Mr Newell or Mr Muriniti and that they had had ample opportunity to explain the decisions. I found the explanations they gave however to be without merit.
Given the great many similarities in the conduct of Mr Newell and Mr Muriniti in the conduct of the unrelated matters, I am satisfied that they both had have the same attitude to this litigation as they have had on many occasions in the past, as identified over a long period of time. Their cavalier approach to: court procedure; the rules of evidence; their duty to their clients in the context of their undoubted conflict of interest; their duty to their opponent and to the Court to be candid; and to conduct the proceedings consistent with their obligations under s 56 of the CPA, is almost identical in character. Indeed they have persisted in arguments before me that have long since been closed to them by reason of the findings other Courts have made on many occasions in the unrelated litigation. It speaks loudly of a tendency to act in the way I have identified, making it more likely that they have acted in this way on this occasion.
I am satisfied that the findings of fact in the unrelated cases have significant probative value in this case so as to permit their admissibility under s 97 of the Act.
Given Mr Newell's concession as to admissibility and where it has been open to both Mr Newell and Mr Muriniti to respond to what might otherwise be regarded as findings of fact in unrelated cases thus resulting in a lack of procedural fairness, I have determined that the conclusions arrived at in the unrelated cases, are relevant tendency evidence and I have taken them into account.
They have also been relevant in my determination to refer the papers to the Legal Services Commissioner for the reasons cited, as they show that this is not the first time Mr Muriniti and Mr Newell have been faced with applications of this kind and they cannot be said to be inexperienced in dealing with such matters or the serious implications of the matters that they have put before me.
However, my conclusion, about the lack of regard for the Court and for their opponent, in pursuit of what is said to be their clients' interests, their clear breach of s 56 of the CPA on many occasions and my decision ultimately about whether a personal costs order is appropriate, has not changed by reason of the tendency evidence. Given the other findings that I have made regarding both Mr Newell and Mr Muriniti, they alone make personal costs orders against them both appropriate. The tendency evidence simply confirms my view of Mr Newell's and Mr Muriniti's utter disregard for their professional obligations in respect of the issues I have identified.

The Tendency Findings - The Latest Overarching Conspiracy

During the course of hearing this matter, Mr Muriniti commenced yet further proceedings against a number of parties to have the orders of the Court of Appeal and Taylor SC DCJ set aside in relation to the De Costi matter as having been obtained by fraud. The proceedings are described by Mr Muriniti as an allegation of an "overarching conspiracy. They are different [to King v. Young] but they are connected by a conspiracy." Mr Muriniti said that although those causes of action were not related, they were connected "if you've got people conspiring to pervert the course of justice."
Mr Muriniti agreed that following a contested hearing more than two years ago, the Court of Appeal varied costs orders made by Taylor SC DCJ. When it was suggested that there was no prospect of any Court setting aside those judgments on the basis of some type of fraud, Mr Muriniti said, "I absolutely reject it. I don't go around suing 23 parties if I don't believe that I have a proper cause of action." Mr Muriniti said that he believed that that claim had reasonable prospects of success.
Mr Muriniti said that the personal costs orders arose under extremely controversial circumstances, which he did not feel appropriate to further explain. He said, "Those matters are still ongoing. They are not completed. They are not finalised. I have extremely serious concerns about the circumstances that those orders were made and I do not shoot (sic) home to Mr Newell the responsibility for the fact that those costs orders were made." … "there are on - proceedings in contemplation which will be commenced later this year (and now partially commenced I was later told) to deal with the facts and circumstances that gave rise to those costs." He said that neither he nor Mr Newell were represented in a competent and honest manner in both the District Court and the Supreme Court proceedings. He went on to explain, "Had we been properly represented and had the Court been properly assisted each and every one of those amendments of those ideations would have been properly and adequately explained. And, in fact, when we go back to the Supreme Court the Supreme Court will get the assistance it should have gotten." He said he would be making an application for those findings to be set aside.
Mr Muriniti said that, "The decisions in question relate to highly controversial proceedings which are yet to be completed". Mr Muriniti described the latest proceedings in the following terms, "There was an appeal lodged in respect of a decision to, based on Anshun, which went - which was the subject of litigation between myself, Mr Newell and Lawcover" and that those proceedings were related and connected with the litigation between King v Young following the judgment of the Court of Appeal in October 2016. He said, "They are related, connected proceedings which arise out of a decision in Young v King (No 11) which were the subject of an appeal" in which costs orders were made against him and Mr Newell. He said that Lawcover had "killed off" that appeal. He said, "Lawcover sought to injunct us from running the appeal and - and they succeeded on the - on a contractual construction issue. Then killed off the appeal itself last year."
Mr Muriniti said that he and Mr Newell had now commenced proceedings in the Federal Court against Lawcover, and in respect of which they were acting for themselves.
In short, the evidence from Mr Muriniti was that he did not accept the tendency of either he or Mr Newell as described in the various unrelated cases, and was seeking to have them re-agitated, yet again, in the Courts.
Mr Muriniti said that the latest proceedings in the Federal Court was just a "first tranche of proceedings" and that there will be another "tranche of proceedings" that he and Mr Newell will seek to run together, which will deal with an allegation that he and Mr Newell are making of a conspiracy to pervert the course of justice. He said that it was not in the public interest for the details of the allegations that he was going to make to be revealed at this early stage. He explained as a reason not to provide information of the conspiracy to pervert the course of justice because, "Lawcover will deal with it". He said that he did not propose to ventilate it before me.
Mr Muriniti's explanation about not fully ventilating what is, in effect, an allegation of a criminal conspiracy, "in the public interest" was bizarre. It is a basic legal proposition that if allegations of that kind are to be made, that need not only be fully particularised, but also that they cannot be made without evidence.
Mr Muriniti said that only part of his pleading had been filed. He said, "We commenced proceedings yesterday, but in addition to that - because we're alleging an overarching conspiracy. There was a separate statement of claim which will have to be filed shortly, we're presently working on. Then the two - we'll seek to run both sets of proceedings at the same time."
I enquired of Mr Muriniti as to whether he was alleging two conspiracies. He replied, "No. It is an overarching conspiracy that goes across matters." I asked him whether or not he was required in that first pleading to nominate all members to the conspiracy. He replied "Yes, but not to plead how the conspiracy overarches into the other matters." It was in respect of that matter that Mr Newell commented to Mr Muriniti about whilst under cross-examination whilst the AVL was disconnected.

The Tendency Findings from Previous Unrelated Cases

The Plaintiffs rely on the fact that the Courts have variously described the conduct of Mr Muriniti and Mr Newell in the past in following ways (emphasis added to show the relevant tendency):
The Court of Appeal (Bathurst CJ, Ward and Emmett JJA) refused leave to appeal; Young v Hones (No 2) [2014] NSWCA 338. In doing so it recorded at [119]: "that it was a serious matter to allege fraud and that it was incumbent on Ms Young's advisors (Mr Newell and Mr Muriniti) not only to comply with their ethical obligations but in doing so, also to apply objectivity when advising Ms Young and in pleading such a cause of action. The Court expressed the view the text and tone of the correspondence and submissions made on Ms Young's behalf did not give rise to a great deal of confidence in Ms Young's legal advisers' ability to comply with their ethical obligations and apply objectivity when advising Ms Young and in pleading fraud."
In 2012 Sheahan J heard Ms Young's 2008 motion to reopen, giving rise to a number of judgments including Young v King (No 3) [2012] NSWLEC 42 and Young v King (No 4) [2012] NSWLEC 236. In the context of that litigation, Mr Newell and Mr Muriniti were described as being responsible for "an ever-expanding picture of a possible miscarriage of justice was being painted each time the matter came before the court." This accurately describes Mr Muriniti's approach to the "overarching" conspiracy claim before me.
Sheahan J dismissed Ms Young's allegations of collusion, fraud and corruption on the basis that it had no evidentiary basis.
Sheahan J refused Ms Young's application, resulting in Young v King (No 6) [2015] NSWLEC 111. Relevantly regarding the way in which that litigation was conducted by the Mr Newell and Mr Muriniti, Sheahan J observed as follows: "[84] The Young "camp" has frequently shifted ground, amended documents, ignored directions and correspondence, and caused delay, but she and her representatives have received many indulgences ... In judgment No 4, I blamed Young's legal team for many of the steps they took which led to some thirty listings before me prior to the September 2012 hearing. [88] There appears to be no end to the amount of material Young and her advisors can generate for consideration by various Courts, whether in judicial review proceedings, or by way of the application to set aside McClellan J's orders, or in proceedings brought against former advisors. [90]…Muriniti and Newell have flagrantly disobeyed directions, failed to meet timetables, and failed to be clear and fair in indicating the witnesses to be called or relied upon. [173]…[Mr Newell's submissions] amount to retrospective reconstruction of words and events completely outside their context at the time …. much of those submissions and materials are irrelevant and unhelpful". [227] Although a plethora of material was tendered, I was not taken to any evidence of any real, probative value, which would warrant a finding of fraudulent behaviour by anyone involved in these proceedings. Young's case is full of insinuations, and I agree with the statement made by Wright (Tp567, LL40 - 41) that "the evidence in this case and the way it is relied upon is so vast and complex that the allegations become almost impossible to unravel". [229] [Mr Newell] sought to describe the case (at Tp562, LL16 - 17) as "a riddle, wrapped in a mystery, inside an enigma" (although he quoted Winston Churchill inaccurately), and that is a fair description of how he put Young's position to the Court. In such circumstances, it would be entirely inappropriate to make a finding of fraud against anyone involved in the matter."
On 1 December 2015, Sheahan J summarily dismissed the Young Costs Application against eight of the Respondents to that motion as an abuse of process; Young v King (No 8) [2015] NSWLEC 187.
On 19 February 2016, Sheahan J dismissed Ms Young's costs application against the remaining respondents as an abuse of process, and ordering Ms Young to pay the Kings costs of the proceedings on an indemnity basis; Young v King (No 9) [2016] NSWLEC 4. In doing so Sheahan J described the case to set aside the consent orders was doomed from the start yet Ms Young had been "relentless" and that the Kings were clearly entitled to be compensated for all the expense it had caused them. Further, his Honour commented the proceedings had been lengthy and costly and that by Ms Young's own actions and those of her lawyers she had continued to pursue a case based on a conspiracy and/or some fraud where no probative evidence had been adduced.
On 27 March 2017, Sheahan J made orders for personal costs: Young v King (No 11) [2017] NSWLEC 34, and found that Mr Newell and Mr Muriniti had: "… behaved incompetently, unprofessionally, inappropriately, and against the true interests of their client, who was entitled to expect competent and reasonable representation. …Having embarked on these futile courses, the lawyers continued to incur, on Young's behalf, unnecessary liability for her own costs and the costs of those she unreasonably pursued, and they must be held responsible." (at [210], [212])
On 19 October 2016, the New South Wales Court of Appeal (Basten and Gleeson JJA and Emmett AJA) dismissed the appeal from Young v. King (No 6); Young v King [2016] NSWCA 282. Of the conspiracy theories, the Court observed at [90] that there was not a "skerrick of evidence of the conspiracy hinted at", that it was alleged "completely without foundation in the evidence and should never have been made." and that the primary judge said as much in his reasons. His Honour was not directed to any evidence of conspiracy… There was simply assertion after assertion without reference to any evidentiary support."
On 1 March 2017, Gordon and Edelman JJ of the High Court refused special leave from the New South Wales Court of Appeal judgment of 19 October 2016.
Mr Muriniti and Mr Newell were ordered to pay Lawcover's costs. In that matter three judges of the Court of Appeal unanimously directed the Registrar of the Court of Appeal to forward the papers in the proceedings to the Legal Services Commissioner with a recommendation he investigate whether the conduct of Mr Muriniti and/or Mr Newell amounted to either unsatisfactory professional conduct or professional misconduct. That matter has not been finalised.
In Lawcover Insurance Pty Ltd v Leonardo Carlo Muriniti & Robert Duane Newell [2017] NSWSC 1557 Sackar J. dealt with the dispute that Mr Muriniti and Mr Newell had with Lawcover, arising from Young v King (No 11). His Honour described the allegations of bad faith raised by them as "wide reaching and somewhat unstructured".
As to Mr Newell's evidence and submissions throughout the hearing that he had "reasonable apprehensions" that Lawcover and the independent lawyer would corrupt the process, that there were "a large range of powerful people are lined up against the progression of the claim" and that "the motivation to shut [the [First Conspiracy allegation] down would be expected to be overwhelming", Sackar J found that there was simply no evidence to support it. It is the conspiracy theory that was peddled before me.
Sackar J described their allegations in the following terms: "all routed in some allegation regarding the corruptness of Warringah Council but extending to different persons depending on the proceedings - have been dismissed on every occasion", and summarised the history of judicial labels being given; such as "fevered imaginings", "completely without foundation" and "unarguable".
Sackar J described Mr Newell and Mr Muriniti's attempt somehow to draw Lawcover and the independent lawyer (who was never appointed) into its web of widely dismissed conspiracy allegations ("the Second Conspiracy" theory) as an attempt to circumnavigate the Policy speaks to the baseless nature of the case in that respect. His Honour remarked that, "[o]n the evidence, there is no suggestion whatsoever of Lawcover somehow being complicit in the alleged conspiracy concocted by the [Respondents], let alone any grounds for [Mr Muriniti's and Mr Newell's] apprehensions about the independent lawyer process also being corrupted." Again Mr Newell enlivened and enlarged that conspiracy in seeking to justify a decision not to find independent representation for the Defendants in this case.
Sackar J also roundly rejected Mr Newell and Mr Muriniti's allegations that Lawcover engaged in bad faith by keeping them in the dark and not adequately defending them during the Personal Costs Applications, and that Lawcover "did not lift a finger". His Honour described the allegations as having no substance, no evidence to support it and that, in short, the evidence plainly showed to the contrary and held that there is no evidence suggesting that Lawcover's representatives were anything other than professional, competent and proper.
Sackar J described the continued assertion of a conspiracy in these terms "In broad terms, the reason was participation in a conspiracy, in substance the same one [Mr Newell and Mr Muriniti] had attempted unsuccessfully to articulate for some time and which had been roundly condemned. Unfazed and undaunted, Mr Newell as principal architect, along with Mr Muriniti, sought yet again to deploy the same strategy against the Kings and others. To describe the strategy as bold is far too generous. It was, in my view, positively reckless."…"Prima facie, on the material I have before me, [Mr Newell and Mr Muriniti] do not appear to be able to point to any such evidence supporting the advancement of their non-sequitur application."…"On these grounds, [Mr Newell and Mr Muriniti's] decision to nonetheless attempt to pursue an appeal is, in my view, an example of a strategy that the best defence is a good offence. Adding parties to, in substance, the same rejected conspiracy could hardly, to any rational thinking person, enhance the prospects of Sheahan J warming to the idea. Indeed on one view enlarging the conspiracy to additional persons only detracts from the theory's plausibility."…"[Mr Newell's and Mr Muriniti's] client had over the years paid dearly for their irrational and reckless strategy. Pushing on with the application in the way they did raises, in my mind, real questions as to their judgment and more to the point their competence. To have imagined such a novel application could ever be made let alone have any remote chance of succeeding was not something together or alone they appeared to consider. The vigorous zeal they displayed has led to financial disaster for their client, now a bankrupt."…"To say, as they both have, that [the advice given on behalf of Lawcover] was not an advice, is disingenuous. It is painfully clear that any advice which was contrary to theirs would never be acceptable to them or regarded as reasonable. They did not want to hear anything at all which conflicted ever so slightly with their point of view of the world. Their stance was as unreasonable as it was absurd."…"a view plainly unsustainable in the mind of any rational person, let alone a legal practitioner." Sackar J described the allegations on this issue as "baseless, and provide no grounds…".
Finally Sackar J remarked that Mr Newell's and Mr Muriniti's attempt to continue a dispute with Lawcover is the product of their "irrational thinking rather than any honestly held view". His Honour found that Mr Muriniti and Mr Newell deliberately chose not to avail themselves of the mechanism under the contract and that their claim that they could nonetheless run the appeal carried "no substance". They failed in all arguments against Lawcover.
In January 2018 Lawcover sought a fixed lump sum order for costs, to be paid on an indemnity basis. In short Mr Newell and Mr Muriniti, on the question of costs, ignored his Honour's findings (as they did here regarding my findings upholding the Plaintiffs' objections to the various Amended Defences). His Honour concluded that "That stance in my view was not and is not based on reality. [Mr Muriniti's and Mr Newell's] thinking in that regard dominated every aspect of the litigation even in my view to the point of distorting their construction of the Lawcover policy. In my view they acted wholly unreasonably in the conduct of the litigation and in bringing the Cross Claim which in turn involved dense factual assertions of bad faith which failed. The so called "trap" along with the bad faith allegations against Lawcover not only unnecessarily delayed the proceedings but had the effect of squandering precious resources. As the Plaintiffs point out in their submission various opportunities were afforded the Defendants to invoke the QC Clause so as to avoid litigation. I made findings of fact in this regard in my judgment at [82]-[96]. In my view this is an entirely appropriate case for the award of indemnity costs."
Relying in part on the conclusion that it was highly likely that Mr Newell and Mr Muriniti would carry their entrenched and unreasonable attitude over into a dispute on the question of costs, his Honour made a lump sum order.
Mr Newell and Mr Muriniti appealed against the decision of Sackar J, resulting in the judgment of the Court of Appeal in Muriniti; Newell v Lawcover Insurance Pty Ltd (No 2) [2018] NSWCA 311, raising nine issues on appeal, set out in 16 separate grounds of appeal.
In rejecting the argument regarding the construction of the insurance contract, the Court described it as a "nonsense", and an "illogicality", and held that Mr Newell and Mr Muriniti had provided no reasonable argument on that issue of construction and had sought to "skirt around this flaw in their construction".
So far as the bad faith allegations were made the Court held that Mr Muriniti and Mr Newell had made them "at a high level of generality and, in effect, required that bad faith be assumed". The Court was clearly cognizant of the long history of allegations involving the conspiracy theory, and described it as "untenable". The Court described an argument in respect of the matters before Sheahan J as "a red herring".
Indeed, in this matter Mr Newell further exaggerated that already untenable submission, and accused Mr Lloyd (who appeared for Lawcover and in respect of whom there has been no criticism by any Court) of being motivated to "terrorise" Mrs Young. That was an outrageous suggestion in the circumstances of the history of the Young litigation and I immediately required Mr Newell to withdraw it, which he did. However he clearly continues to maintain the submissions about the conspiracy, that the Court of Appeal (and other Courts) have clearly said on a number of occasions is without foundation and ought not have been made.
The Court commented in respect of Mr Newell's and Mr Muriniti's likely prospects of success in the appeal that Lawcover refused to run as follows: "...any competent lawyer would have appreciated that the summary dismissal of Mrs Young's application for costs against the Kings and the 16 non-parties was, at the least, highly likely, if not inevitable" and held that their criticism of Lawcover's advice was unfounded.
It is important to note that in the Court of Appeal, Mr Newell and Mr Muriniti continued to act for Mrs Young and she did not obtain independent advice on the question as to whether she should waive privilege. As such they could not argue any prejudice by reason of Mrs Young's legal professional privilege. It is noted that in this case Mr Newell and Mr Muriniti have also continued to act for the Defendants and, despite my urging them and their client's to do so, they have sought no independent legal advice in respect of either who ought represent them in the claim for a personal costs order or in respect of their decision not to waive privilege. The result of that has been that there is no evidence before me that the Defendants are in any way responsible for the various iterations of the Amended Defence, and indeed I do not understand Mr Newell to argue otherwise.
The Court described Mr Muriniti's letter to Lawcover's lawyers asserting that conspiracy was never part of their case as "inaccurate and, indeed, was mischievous".
The Court observed that in respect of the bad faith allegations against Lawcover and its lawyers, "[i]t has taken some time to grapple with [Mr Muriniti and Mr Newell's] submissions, which at times were nearly impenetrable." I had the same experience in this case.
Ultimately the Court concluded that "any competent lawyer would have realised that the costs application against the Kings and the non-parties was bound to fail, in the face of an existing order that Mrs Young pay the Kings' costs."
The Court also observed that the submission, that Lawcover's advice was dishonest, was without foundation and should not have been made. I have made the same finding with respect to the allegations made against Mr Goldsmith.
Other submissions were described as "baseless" and "fanciful".
The provisions of the policy allowed for the fact that if the parties did not agree as to the independent lawyer, the President of the Law Society was to appoint a lawyer. Mr Muriniti and Mr Newell sought to maintain their concern that the system could be corrupted by asserting that Lawcover was a wholly owned subsidiary of the Law Society, and the President, if asked to appoint a lawyer pursuant to the policy would have a conflict of interest. They also submitted that any lawyer appointed by the President of the Law Society might understand "that in the environment he's operating it's not in his interests to defend Lawcover". The Court of Appeal described the submission made by Mr Newell and Mr Muriniti in these terms: "These submissions do not warrant any substantial consideration. The allegations are lacking in particularity and are unsupported by evidence. In form and substance, they are scandalous." Similarly, Mr Newell continues to peddle the submission that the Defendants in this case may not be able to obtain independent legal advice, given the relationship all lawyers have with Lawcover. The submission was, in my view, ludicrous and without any foundation.
It was held that there was no evidence to support Mr Newell and Mr Muriniti's argument that Sackar J had failed to provide adequate reasons, and that his Honour had clearly satisfied his obligation. The Court held that the "ground was unarguable and should not have been advanced at all".
The argument that there was a reasonable apprehension of bias based on Sackar J's reference to the conduct in the Land and environment Court proceedings also failed. Mr Newell and Mr Muriniti argued, as they do here, that Sackar J "relied upon collateral and juridical irrelevant judgments in arriving at his conclusions". They argued, as they do here, an entitlement to re-litigate the same conspiracy case. The Court observed that, "It was unsurprising, therefore, that his Honour, having heard the appellants' submissions on essentially the same issue, came to the same conclusion as had been reached in those decisions."
Mr Muriniti says in his evidence in this case, not that Sackar J was biased or that a reasonable apprehension might be had as to that fact, but rather he was simply "misled". By whom, it was not made clear, and one suspects that further players are being added to the conspiracy theory.
Mr Muriniti continues, in his evidence before me, to blame the law firm acting for Lawcover for the way in which he was represented. That firm is part of the legal action which has been only recently commenced in the Federal Court. Mr Muriniti rejected the notion that the claim is completely unmeritorious and is simply yet another step by him and Mr Newell, in the prolongation of many legal proceedings that he has become involved in. He rejected the notion that the claim was a further attempt by him to conceal and deflect the adverse findings.
In April 2016, Smith J of the Federal Circuit Court, in dismissing an application to set aside a bankruptcy notice issued against Ms Young, observed that the underlying conspiracy allegation which was sought to be ventilated was unarguable and should never have been argued by members of the legal profession; Young v Hughes Trueman Pty Ltd [2016] FCCA 989. His Honour described the application as "ill conceived, ill prepared and poorly presented". The same may be said of Mr Newell's presentation of the case before me.
In September 2016, Bromwich J dismissed an application by Ms Young for an extension of time to file a notice of appeal from Smith J of the Federal Circuit Court refusing to set aside the bankruptcy notice; Young v Hughes Trueman Pty Ltd [2016] FCA 1176. Bromwich J, in dismissing the application, described the argument as unacceptable "fevered imaginings" and observed that the conduct as reprehensible.
On 5 May 2017, Lee J in granting an application for costs against the Respondents personally; Young v Hughes Trueman Pty Ltd (No 4) [2017] FCA 456, made the following comments: "[56] Whether [maintaining the conspiracy] be misplaced zeal or some other reason, the fact is that [Mr Newell and Mr Muriniti] have not only instituted and maintained a proceeding which had no prospects of success but have also engaged in something more, being unreasonable conduct in making serious allegations absent a reasonable basis and also with a disregard of any proper consideration of the prospects of success. For whatever reason, the maintenance of the allegation in this proceeding amounts to a dereliction of duties of each of Mr Newell and Mr Muriniti to the Court. It has also caused them to breach the duty contained in s 37N(2) of the Act by failing to take sufficient account of the overarching purpose and failing to assist Mrs Young to comply with her duty to conduct the proceeding before Bromwich J according to law and as quickly, inexpensively and efficiently as possible. [57] A costs order which will have the effect of compensating the respondents ought to be made. Given my findings, there is clearly a relevant delinquency sufficient to justify the awarding of costs on an indemnity basis: see Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233. My view that indemnity costs are appropriate is fortified by the fact that at material times the Solicitors have been on notice that the respondents have regarded the allegations of conspiracy as being made and maintained inconsistently with professional standards. The Solicitors could have been in no doubt as to the possibility of a personal costs order being sought if the allegations were persisted in."

The Respondents' Lack of Candour and the Most Recent Case

Despite my raising with Mr Newell the decision by Sackar J and the following appeal, and my concern that I had not been provided with all relevant decisions, to understand the submission that the various conspiracy theories could be litigated and where it was asserted that new proceedings had been commenced in April 2020 in respect of one or more of those conspiracy allegations, I was not taken to the most recent relevant decision: Muriniti v King; Newell v Hemmings [2019] NSWCA 232 (2 October 2019). In that case Mr Newell and Mr Muriniti were ordered to pay the costs personally.
At that time the Court recorded the "complicated litigation history" which I have set out and held that Sackar J's decision was correct and that the Respondents have "consistently frustrated all of Lawcover's attempts to bring the applications for leave to appeal to an end. That active non-cooperation has persisted even after the High Court refused special leave in May 2019 and persists today."
In that case, the Respondents made lengthy written and oral submissions in order to "re-agitate the proceedings [against Lawcover] already conclusively determined". The Court determined that the submissions were "hopeless". The Respondent's arguments were described as "extravagant and labyrinthine" and did not address the relevant application.
So far as the conspiracy theory that Mr Muriniti and Mr Newell attempted to peddle in these proceedings, the Court of Appeal held that they "have made, and continue to make, unwarranted allegations of a most serious kind about Lawcover's conduct in seeking to bring the proceedings to a close": one that was dismissed once by Sackar J and twice by the Court of Appeal.
The Court of Appeal described Lawcover's conduct, as "proper and commendably restrained" and Mr Muriniti's and Mr Newell's claims as "extravagant and, on the evidence, baseless". The Court went on to describe the fact that there was no evidence or coherent argument advanced that there was any cause of action against Lawcover and refused to enter into any examination of the original theory. The Court observed that the conspiracy theory regarding Lawcover could not be correct in the face of the conclusive finding by this Court that Lawcover was entitled not to appeal from orders made.
The Court of Appeal observed that delays and costs in the matter were already unacceptable and that the "saga of litigation orchestrated by [Mr Newell and Mr Muriniti] must one day come to an end" and that the Lawcover conspiracy theory could never be progressed and ought not be allowed to "continue to moulder in the Court's lists". The Respondents have been permanently restrained from pursuing an appeal against the orders made in Young v King (No 11) and as such any further allegations arising from the original conspiracy theory cannot reasonably be said to have any prospects of success.
This latest decision flies in the face of submissions made by Mr Newell and Mr Muriniti in his evidence that, once properly understood, the conspiracy theories would have good prospects of success. As such I regard the failure by Mr Newell to draw my attention to this decision in submissions and the failure by Mr Muriniti to refer to it in his evidence, has been a significant dereliction of their respective duties of candour to the court. Given that it was not raised in argument, I have not taken it into account as tendency evidence. The cases that I have referred to in the tendency context, are either those cases put forward by Mr Goldsmith, the decision of Sackar J. And the appeal from the decision, and any cases referred to therein (for example the Federal Court cases).
The Court of Appeal observed that the conduct of Mr Newell and Mr Muriniti gave cause for concern: that they have been variously been found to have "behaved incompetently, unprofessionally, inappropriately and against the true interests of their client. Each has embarked on futile litigious activities and incurred considerable unnecessary costs liabilities", "made serious allegations amounting to fraud with no apparent proper basis"; and have "sought needlessly to prolong these proceedings on the basis of even more outlandish allegations made in correspondence and repeated in this Court with no apparent basis."
The fact, that in light of those observations by the Court, Mr Muriniti and Mr Newell continue to do so before me is cause for considerable concern. I note that the Court of Appeal directed the Registrar to forward the papers to the Legal Services Commissioner with a recommendation that he investigate whether the conduct of Mr Muriniti and Mr Newell amounts to either unsatisfactory professional conduct or professional misconduct. I propose to do the same in this matter on this issue.

Legal Principles - Indemnity Costs

The Court has a very wide discretion in relation to an award of costs. It can award indemnity costs pursuant to s 98(1)(c) of CPA.
An award for indemnity costs may be made in a variety of circumstances. In this case it is founded on the many and varied acts of delinquency on the part of Mr Newell and Mr Muriniti which has also justified the making of personal costs orders.
The costs are to be paid on an indemnity basis.

Finding In Respect of Personal Costs Orders Against Mr Newell and Mr Muriniti

It follows that I propose to make the orders sought by the Plaintiffs in the Notice of Motion, together with the costs of the further hearing on the same issues, on dates not listed in the Motion.

Orders

I make the following orders: 1. I order that the following costs be paid in accordance with order 2 below: 1. The Plaintiffs' costs of and occasioned by the Defendants' application for leave to file a proposed amended defence provided to the Plaintiffs' lawyers on 15 August 2019 including the costs of and occasioned by the hearing on 5 September 2019. 2. The Plaintiffs' costs of and occasioned by the Defendants' application for leave to file the 2nd proposed amended defence provided to the Plaintiffs' lawyers on 20 September 2019. 3. The Plaintiffs' costs of and occasioned by the Defendants' application for leave to file the 3rd proposed amended defence to the Plaintiffs' lawyers on 26 September 2019. 4. The Plaintiffs' costs of an occasioned by the Defendants' application for leave to file the 4th proposed amended defence including the costs of and occasioned by the hearings on 25 November 2019, 4 December 2019 and 11 December 2019. 5. The Plaintiffs' costs of and occasioned by the Plaintiffs application for a personal costs order pursuant to Section 99 of the Civil Procedure Act 2005 including costs of and occasioned by the hearings on 20 March 2020, 23, 29, 30 April 2020 and 1 May 2020. 1. The costs ordered in order 1 above are to be paid: 1. to the Plaintiffs by Leonardo Carlo Muriniti and Robert Duane Newell; 2. upon the indemnity basis; and 3. forthwith, with leave bring grated to the Plaintiffs to have the costs assessed forthwith, if not agreed. Noted: These reasons are to be sent by the Registrar so that the matter may be referred to the Legal Services Commissioner to determine whether or not Mr Muriniti and/or Mr Newell have engaged in unsatisfactory professional conduct or professional misconduct.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 July 2020

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