Consideration
72 The additional evidence Mr Jowett adduced demonstrated that Mr Dimmock was left in charge of the defence of the Equity Proceedings notwithstanding considerable material in Brydens' possession demonstrating, to put it as neutrally as possible, his unreliability in relation to matters he was given to handle. Save for the events of May 2008 to which I will come, it does not appear that either Mr Bryden or Mr Hagipantelis took any direct role in supervising his conduct of the Equity Proceedings. To the extent that Mr Dimmock was "supervised", that was apparently done by a person who was not a solicitor or, apparently, a legal practitioner. While it is not necessary, in order to burden Mr Bryden and Mr Hagipantelis with the costs orders Mr Jowett seeks, to establish they had personal knowledge of the manner in which Mr Dimmock was neglecting the conduct of the Equity Proceedings (Myers v Elman) the additional evidence establishes that Mr Dimmock's delinquency, both in relation to the Equity Proceedings, in relation to his handling of other estate matters and generally was clearly known to both Mr Bryden and Mr Hagipantelis.
73 It was apparent from the s 263 letter written by Mr Bryden that as early as December 2007 the firm knew that Mr Dimmock had, at best, made a serious misrepresentation to his principals concerning a matter in which he originally denied appearing and, as a result, had been "warned and counselled" and given directions concerning the conduct of his practice as an employee of Brydens. In February 2008 he had, apparently, failed to account to Brydens for a substantial quantity of cash received from a client. Once again, according to the s 263 letter, he was "specially supervised, counselled and supported to the best of our ability …".
74 In about May 2008 Mr Dimmock was directed by Mr Brandalise to transfer his estate matters to another solicitor, a decision made because it was apparent after a "review" that the view was formed that Mr Dimmock's conduct of those matters was unsatisfactory. It is not apparent who formed that "view", whether it was either or both Mr Bryden and Mr Hagipantelis or Mr Brandalise alone. If it was the latter it demonstrated what appears to be a remarkable delegation of responsibility by the principals in a legal firm to a person carrying out executive rather than legal duties. However more significantly the "view" which apparently led to the transfer was that Mr Dimmock had "neglected" the estate matters. That "view'" was conveyed to Mr Bryden and Mr Hagipantelis, if not earlier, when they were copied in on Mr Brandalise's email to Mr Dimmock of 16 May 2008, describing the latter's conduct in relation to the Equity Proceedings as "pathetic".
75 Despite this "view" and despite the fact that on or about 16 May 2008 Mr Brandalise became aware of Mr Lewis' 14 May 2008 affidavit which set out Mr Dimmock's serial delinquency in complying with court orders and rules in relation to the Equity Proceedings, it was left to him to conduct their defence. Mr Hagipantelis was consulted in relation to Mr Lewis' 14 May 2008 affidavit. He directed Mr Dimmock to comply with the outstanding orders in relation to the affidavits.
76 Yet by May 2008, the history of Mr Dimmock's delinquency both in relation to the Equity Proceedings, in other estate matters and the "unreliability" referred to in the matters referred to in the s 263 letter, was such that neither Mr Hagipantelis or Mr Bryden could, in my view, have had any confidence that he would comply with Mr Hagipantelis' direction to complete the affidavits for the Equity Proceedings. Yet it is apparent that neither Mr Hagipantelis nor Mr Bryden took any steps to ensure that Mr Dimmock complied with that direction.
77 The minimum discharge of Mr Hagipantelis and Mr Bryden's duty was to ensure that the affidavits were filed in time to enable Mr Jowett's legal representatives to complete their preparation for the hearing and for the hearing to proceed on 29 May 2008. Their failure to do so was a serious neglect of their duties. That neglect caused Mr Jowett to incur, at least, the costs of preparing for the hearing on 29 May 2008, of the hearing itself and of the stay application.
78 Leaving Mr Dimmock to conduct the Equity Proceedings, in my view, indicated a substantial failure on Mr Hagipantelis and Mr Bryden's parts to appreciate the extent to which they had failed, in the circumstances, to discharge their duty to the Court. By mid-May 2008 they were aware that Mr Dimmock on behalf of clients of their firm had failed to comply with court directions made as long ago as 11 October 2007. Mr Brandalise's statement to Mr Dimmock, "this file is your mess, clean it up", also manifested a serious failure by Mr Hagipantelis and Mr Bryden to appreciate their duties to their clients, the opposing party and the court. No explanation was forthcoming in this Court as to why despite the firm's view that his estate matters had been "neglected" and transferred to another solicitor, the Equity Proceedings, to which an even more serious description could be attached, were left in Mr Dimmock's charge.
79 It was Mr Hagipantelis and Mr Bryden's responsibility to ensure that the court's orders and rules were complied with in relation to matters conducted by their law firms. They are as responsible for his persistent failures to comply with court directions from October 2007, as they are for his failures to comply in 2008 when they were clearly on notice of his omissions in this respect. In short, they were responsible for the neglectful manner in the way their firm conducted the Equity Proceedings: Myers v Elman (at 335) per Lord Porter.
80 Indeed, Mr Bryden and Mr Hagipantelis admitted, in my view, that they were responsible for the neglectful manner in the way their firm conducted the Equity Proceedings and the wasted costs which flowed therefrom by giving Ms Kelly and Mr McLennan the indemnity set out above (at [34]) "very shortly after the problems with … Mr Dimmock were discovered". It was also in substance admitted in the application they made on the defendants' behalf to stay McLaughlin As-J's orders. It must have been apparent to Mr Bryden and Mr Hagipantelis that the endeavours by Mr Jowett's legal representatives to obtain a variation of McLaughlin As-J's costs orders to cast the burden on them was driven by a concern that Ms Kelly and Mr McLennan would be unable to meet that order and, too, that it was improbable, to the extent order 4 might benefit Mr Jowett, that Mr Dimmock, whose whereabouts were unknown, would ever meet it - Mr Lewis having expressed the view as to Mr Dimmock at least, that "that the costs orders against him will be practically worthless": Mr Lewis' 19 May 2009 affidavit.
81 It is open to the Court, in the substantive appeal, to make any order which ought to have been given or made or which the nature of the case requires: s 75A(10), Supreme Court Act. In my view, had the additional evidence been before McLaughlin As-J, it would have been appropriate, rather than ordering Ms Kelly and Mr McLennan to pay personally Mr Jowett's costs on an indemnity basis, for his Honour to have ordered Mr Bryden and Mr Hagipantelis to pay those wasted costs by reason of their serious neglect in the conduct of the defence of the Equity Proceedings.
82 I would reject Mr Morahan's submission that the present application could have been made on 29 May 2008. It was not until the affidavits were filed by Ms Kelly, Mr McLennan and Mr Brandalise for the purposes of the stay application that Mr Jowett and his legal representatives could have known that it was their legal representatives' neglect and not the defendants' "contemptuous" attitude to the Equity Proceedings as McLaughlin As-J inferred (an inference I note Mr Dimmock did not apparently seek to dissuade him from) which led to their failure to comply with court orders and rules.
83 The stay application was a direct consequence of the necessity for the defendants to seek to preserve their position pending the hearing of the substantive appeal. Its success depended substantially on Brydens' admission that their conduct of the Equity Proceedings had been "woeful" as a result of which the defendants had been left in the dark about their progress. The costs of the stay application were also incurred as a consequence of Messrs Hagipantelis and Bryden's serious neglect.
84 That leaves the question of the costs of the substantive appeal as well as of Mr Jowett's 15 October 2008 notice of motion, his 19 May 2009 affidavit seeking to adduce additional evidence and his 19 May 2009 summons seeking leave to appeal.
85 Insofar as the substantive appeal is concerned, it would not have been commenced at all had the Equity Proceedings been properly conducted. It is apparent that the only reason orders 1 and 2 in the Short Minutes of Order of 15 December 2008 were made by consent was because Mr Jowett's legal representatives accepted the force of what Brereton J said in the stay judgment concerning the prospects of the defendants' success on appeal. In my view that was a realistic concession on their part, but it had to be made not because Mr Jowett faced failure on the appeal because of any conduct on his part, but because of the manner in which the Equity Proceedings were conducted. Thus, prima facie, the costs of the substantive appeal were incurred by Mr Jowett because of the serious neglect attending the conduct of the Equity Proceedings.
86 Further, Mr Bryden and Mr Hagipantelis ought to have appreciated that the consequence of their firm's neglectful handling of the Equity Proceedings being disclosed during the hearing of the substantive appeal would be that the Court would not leave the costs to lie in accordance with Ms Kelly and Mr McLennan's apparent success in having orders 1 and 2 set aside: cf UCPR 42.1. Rather they ought to have appreciated that once their firm's, and their, serious neglect of the Equity Proceedings was proven by the tender of the additional evidence, it was probable that this Court would replace McLaughlin As-J's orders burdening the defendants with costs orders making Mr Bryden and Mr Hagipantelis liable for the wasted costs of the Equity Proceedings and, too for Mr Dimmock's failure to comply with his undertakings to the Court. A sensible appreciation of this probable consequence should have led to a settlement of the issue of orders 3 and 4 in order to give effect to the just, quick and cheap resolution of the real issues in the proceedings.
87 Mr Bryden and Mr Hagipantelis did not, however, settle the matter. They opposed the orders Mr Jowett sought. Further they failed to disclose the indemnity they had given to Ms Kelly and Mr McLennan to Mr Jowett and/or his legal representatives, a disclosure which would, in my view, have assuaged concerns the latter held about Mr Jowett's ability to be indemnified in relation to the wasted costs of the Equity Proceedings. In this respect Mr Bryden and Mr Hagipantelis caused Ms Kelly and Mr McLennan to be in breach of their duty to assist the Court to further the overriding purpose of the just, quick and cheap resolution of the real issues in the proceedings (s 56(3), Civil Procedure Act) and, in turn, by their conduct caused that breach: s 56(4), Civil Procedure Act.
88 I am of the view, accordingly, that Mr Jowett's costs of the substantive appeal were costs he incurred by Mr Bryden and Mr Hagipantelis' serious neglect in the conduct of the Equity Proceedings, as well as without reasonable cause in circumstances for which they were responsible, such as to warrant making an order that they indemnify Mr Jowett against the costs he has incurred in connection with that appeal: s 99, Civil Procedure Act.
89 It is apparent from the extent of the Court's powers pursuant to s 75A(10), that it was unnecessary for Mr Jowett to file the summons seeking leave to appeal or, indeed, the 15 October 2008 notice of motion. However those steps were necessitated, in my view, as a consequence of the serious neglect of the matter by Mr Bryden and Mr Hagipantelis and their breach of their s 56A(4) duty. It is appropriate, in the circumstances, that they pay the costs wasted by the taking of those steps. It was necessary for Mr Jowett to file the notice of motion of 19 May 2009 seeking to adduce additional evidence, in order to place the evidence of serious neglect of the Equity Proceedings before the Court.
90 Although UCPR 42.3(2)(g) permits the Court to make costs orders against Mr Bryden and Mr Hagipantelis notwithstanding that they are not parties to the proceedings, they are directly affected by the relief sought, and should be joined as respondents: UCPR 51.4(1)(a).
91 There may be room for debate as to whether all of Mr Jowett's costs of the Equity Proceedings can be characterised as "wasted". Presumably he swore an affidavit setting out the basis of his claim and prepared other evidence, all of which can be used at the second hearing of the Equity Proceedings. Mr Morahan did not suggest that, if Mr Jowett's application to vary orders 3 and 4 succeeded, the Court should make any more detailed order than that made by McLaughlin As-J. In the circumstances I do not think it appropriate to engage in a cheese-paring exercise to wean out those costs totally attributable to Mr Bryden and Mr Hagipantelis' serious neglect and those which would have been incurred in any event.
92 The indemnity Mr Bryden and Mr Hagipantelis gave Ms Kelly and Mr McLennan, as recorded in the undertaking handed up in Court (see [34]) above, depended on orders being made rendering the latter liable for the costs to which it referred. Mr Morahan accepted that an indemnity Mr Bryden and Mr Hagipantelis gave Ms Kelly and Mr McLennan could not assist Mr Jowett - I would infer, at least directly. In my view the Court should accept the undertaking, however the undertaking, and the indemnity, do not obviate the need to make orders which indemnify Mr Jowett in respect of his wasted costs.
93 Further, even to the extent of the protection the undertaking affords, I would be of the view that to allow the matter to rest on that undertaking would not sufficiently register the Court's disapproval of Mr Bryden and Mr Hagipantelis' conduct.
94 I would make the following orders in the substantive appeal in addition to orders 1 and 2 made by consent in the Short Minutes of Order dated 15 December 2008: