Mathew CHAINA & Ors v THE PRESBYTERIAN CHURCH

Judgment 1HIS HONOUR: Nature of proceedings By Notice of Motion the plaintiffs/applicants seek the following: (1) An order pursuant to s728(1)(b) of the Legal Profession Act 2004 (NSW) for the file or files held by the first and second respondents in respect of these proceedings (Matter No 20472/2002) be released to the plaintiffs' solicitors, Berrigan Doube Lawyers, forthwith. (2) That the first respondent pay the plaintiffs' costs in the motion. 2The first respondent is Sarvaas Ciappara Lawyers (SCL) and the second respondent is McLachlan Thorpe Partners (MTP), both of whom were solicitors previously engaged by the plaintiffs. Berrigan Doube Lawyers (BDL) are the plaintiffs' current solicitors. Factual background 3The primary proceedings arise from the death of a schoolboy who drowned while attending a school camp on 23 October 1999. The second and third plaintiffs are the deceased's father and mother. The fourth and fifth plaintiffs ("the company plaintiffs") are family companies operated by the father and mother, who are the directors and sole shareholders. Together they are the applicants on the motion. The sixteen defendants comprise the entity which conducts the School and the members of the School Council at the time. 4The parents claim damages for nervous shock occasioned by the deceased's death. The company plaintiffs claim for loss of the services of the parents as principals, directors and managers of the business as a result of the injuries suffered by the parents. The company plaintiffs claim past and future economic loss by way of a decline in business and the resultant loss of profits. Their claim is for damages per quod servitium amisit . The defendants have admitted liability for the deceased's death, but otherwise challenge the basis for the company plaintiffs' claim. 5The company plaintiffs allege that because of the inability of the two parents as key employees to function effectively, they lost the opportunity to develop and market cleaning products. The company plaintiffs allege that the cleaning products had special characteristics and would have been successful in both the industrial and domestic markets. The company plaintiffs say that by 23 October 1999 they had completed the development of these products and have suffered a loss in excess of $100 million. 6From 3 May 2005 until 26 November 2008 SCL acted for the applicants and Mathew and Jean-Pierre Chaina (who are brothers of the deceased) in proceedings against the defendants. 7On 4 April 2008 Mathew and Jean-Pierre Chaina settled their claims against the defendants. The settlements were confidential and appropriate orders were made by the Court. From April 2008 until 26 November 2008 SCL undertook work on behalf of the applicants in prosecution of their claims against the defendants and on behalf of Mathew and Jean-Pierre Chaina in respect of the finalisation of their settlements with the defendants and the assessment of their costs in these proceedings. 8On 26 November 2008 SCL received a letter from MTP advising that they acted for the applicants, together with Mathew and Jean-Pierre Chaina and that they had been instructed to assume the carriage of all matters conducted by SCL on their behalf. Authorities to release files, signed by these parties, were attached to that letter. 9On 28 November 2008 the applicants sought an order from this Court, pursuant to s728 of the Legal Profession Act 2004 in respect of the files held by SCL in relation to these proceedings. This application was part-heard on 3 December 2008 and during the course of that hearing a settlement was reached between the parties. By consent, the summons dated 28 November 2008 was dismissed with no order as to costs. 10The terms of the settlement of the 2008 s728 application was recorded in a Tripartite Agreement between SCL, MTP and the applicants dated 3 December 2008. Mathew and Jean-Pierre Chaina were not signatories to the Tripartite Agreement. 11In the recitals to the Tripartite Agreement the following was stated: "G. The purpose of this agreement is: (i) To record the Agreement between the parties for the handing over of documents by the Former Solicitors to the Present Solicitors in respect of each of the matters listed in Schedule 2. (ii) To record the Agreement between the parties for the payment of $150,000 by the client to the Former Solicitors on account of the Former Solicitors' costs and disbursements of providing professional services in the matters invoiced in Schedule 2A. (iii) To secure the Former Solicitors' unpaid proper costs and disbursements for providing professional services in the matters invoiced in Schedule 2A. (iv) To record the further terms of the agreement between the parties." 12In the period between late 2008 and early 2009, SCL provided copies of its files and documents in relation to these proceedings and other matters to MTP. 13On 14 April 2009 SCL sent a letter to MTP attaching an itemised Bill of Costs addressed to each of the applicants and Mathew and Jean-Pierre Chaina for work done in the period 30 March 2008 until 26 November 2008 in respect of the proceedings. SCL's letter sought MTP's confirmation as to whether they were also instructed by Mathew Chaina and Jean-Pierre Chaina to accept service of the Bill of Costs on their behalf. 14On 19 May 2009 SCL filed an Application by Practitioner for Assessment of Costs with the Supreme Court seeking that the Bill of Costs be referred to a Costs Assessor. Shortly after the application was filed in the Supreme Court, it was assigned to Mr Peter Scammell, Costs Assessor, for assessment. On 13 August 2009 MTP lodged a Notice of Objection in respect of the costs application. On 17 September 2009 SCL served their response to the costs objection. 15On 27 November 2009 Mr Scammell determined the costs application and issued a Certificate as to Determination of Costs. The certificate determined that a fair and reasonable amount of costs to be paid by the applicants to SCL was $271,818.14. 16On 24 December 2009 MTP filed an Application for Review of Determination of the Certificate. On 23 September 2010 a Costs Review Panel issued a Certificate of Determination of Costs by Costs Review Panel that affirmed the original certificate. At about this time, SCL also received a Review Certificate from a Costs Review Panel in respect of an assessment of costs owing by the second and third plaintiffs (George and Rita Chaina) in respect of other proceedings ($85,983.83). On 24 September 2010 SCL sent a letter to MTP enclosing by way of service a copy of the Review Certificate and demanded payment of the amount of $271,818.14. 17On 21 October 2010 the District Court of New South Wales entered judgment in favour of SCL against the applicants and Mathew and Jean-Pierre Chaina for the sum of $271,818.14 based on the Review Certificate (the first judgment). On the same date, the District Court also entered in favour of SCL against George and Rita Chaina in different proceedings (matter no 349413/2010) in the sum of $85,983.83 (the second judgment). On 1 November 2010 the District Court issued certified copies of the judgments in each matter. 18The costs and disbursements that make up the first judgment are as follows: (a) Sarvaas Ciappara professional fees and disbursements $ 116,211.64 (b) Andrew Kostopolous of counsel $ 42,158.00 (c) Jamie Stephenson of counsel $ 49,263.50 (d) Dr Wever, medical expert $ 33,000.00 (e) Costacomp Costs Assessors $ 22,000.00 (f) Q Brand Experts $ 7,260.00 (g) Moore Stephens Accounting Expert $ 1,925.00 Total $ 271,818.14