David Stack of counsel, who formerly appeared for the defendants;
Michael Harper and Peter Walsh, who are members of the solicitors' firm which now acts for the defendants;
Philip Taylor of counsel, who held the brief for the defendants at the trial and for a long period before then.
2 The way in which the application arises is as follows. In the Written Submissions laid before me on the plaintiff's behalf when I commenced hearing the costs application various allegations were made of misconduct of legal practitioners representing the defendants. I did not, however, at first perceive that orders in respect of costs were actually being sought against those legal practitioners. When, in the course of argument, Mrs Morris made it plain to me that she desired to claim costs orders against those practitioners, I indicated to her that that could not be done without their being given the opportunity to answer the allegations and opposing the orders and that the appropriate course was that a notice of motion be taken out in the proceedings naming them as respondents to the application and seeking the orders for costs against them. Mrs Morris indicated to the Court that she only wished to do so if there was some prospect of the Court, on the available material, making orders against them. I told her that the Court could not advise her as to that. She indicated herself agreeable to the course that an application should be made to me today for leave to file a notice of motion and make it returnable before me when the costs argument as between the plaintiff and the defendants resumes. I directed that full particulars be given of the allegations of misconduct made against the practitioners. I indicated that, if on the basis of those particulars I was of the view that there was no arguable case against the legal practitioners, I should refuse leave for the motion to be filed and made returnable before me. The plaintiff indicated herself agreeable to this course.
3 The relevant rubric is misconduct. This is one of the bases on which the costs of proceedings may be ordered against solicitors or barristers: see Part 52A rr 43(1) and 43A(1) of the Supreme Court Rules 1970; and see the judgment of the Court of Appeal (Handley and Stein JJA and Sheppard AJA) in Wentworth v Rogers [1999] NSWCA 403 and my judgment in Pinebelt Pty Ltd v Bagley [2000] NSWSC 655.
4 Mrs Morris has brought to Court this morning a 16 page document entitled Particulars of Misconduct and that has been marked as an exhibit on the application before me. She has also tendered various correspondence by solicitors referred to in the Particulars of Misconduct and these also have been marked as an exhibit on the application. Out of court I have read carefully the Particulars of Misconduct and that correspondence. The general nature of the claims of misconduct made against the legal practitioners are summarised in pars (a) to (l) on the first two pages of the Particulars of Misconduct. I do not think it does the plaintiff's case injustice if I say that the misconduct alleged essentially falls into three categories. First it is said that the legal practitioners "agreed to attempt to delay the matter and maximize costs to the plaintiff with the duel [sic] purpose of exhausting her resources and exhausting the commitment of her contingency representatives." It was suggested that in pursuance of that agreement they made denials of facts they knew to be true and put forward arguments they knew to be spurious. In particular, the various motions to introduce cross claims were designed to delay and complicate the matter. Secondly, it is said that the motion for security for costs was knowingly based on the false premise that the plaintiff's case had no merit and was primarily being run as an harassment by the plaintiff's husband. Thirdly, it is alleged that Mr Walsh misconducted himself by writing various threatening letters as a tactic to hinder the effective prosecution of the case. It was said that, in short, all of this conduct was part of a coherent scheme to pervert the course of justice.
5 Certain salient facts should be recorded. They include that the plaintiff's claims were totally unsuccessful at trial and there was judgment for the defendants generally. So far as the security for costs application is concerned, that application was dealt with by the now Chief Judge in Equity. His Honour made an order for security. It should be said that this occurred shortly before the matter was fixed for trial, although the proceedings had been long on foot. The Court of Appeal overturned His Honour's judgment and refused the application for security for costs. This was substantially on the ground that His Honour's judgment, although discretionary, was flawed by insufficient weight being given to the lateness of the application and it was that lateness that led the Court of Appeal to dismiss the application for security. The defendants applied to the High Court of Australia for special leave to appeal against the decision of the Court of Appeal. Despite an application for expedition, that application was still pending when the proceedings came on for trial. I made it plain that I should not vacate the trial date by reason of the pending application in the High Court and the trial proceeded, with the result that I have already indicated.
6 After the general summary of the grounds at the commencement of the Particulars of Misconduct, the Particulars descend to detail of the allegations made against the various practitioners. I do not propose to deal in these reasons for judgment with each and every allegation, although I have considered them all. The allegations against Mr Stack of counsel are said to be of negligence only rather than impropriety, the negligence being in making certain statements to the Court that were false and which he would have known were false had he diligently investigated their basis. Those allegations were principally made in his submissions on the application for security for costs. I cannot see that it is established or likely to be established that the allegations are false. The plaintiff has a propensity to characterise as false any factual statement with which she does not agree. I cannot see that Mr Stack was under a duty to investigate their basis. In any event, the security for costs application was unsuccessful, so that the plaintiff lost nothing in the end either on that application or in the trial as a result of anything said by Mr Stack in his submissions. I do not think there is an arguable case for costs against Mr Stack.
7 The complaints against Mr Harper, Mr Walsh and Mr Taylor are dealt with essentially in a rolled up fashion. Some of the specific matters are as follows. The plaintiff alleges false traverses in the defence; she alleges that the motion to set aside the trial date was improper; she alleges that the presentation of documents was late and made in an unhelpful and disorderly fashion. It should be borne in mind, looking back to the summary at the start of the Particulars of Misconduct, that all these matters are said to go to establishing that they were part of a coherent scheme to pervert the course of justice by delaying and complicating the trial.
8 The plaintiff suggests that the defendants destroyed documents to prevent them being discovered or used and that the legal practitioners involved knew of this. The destruction is said to be an inference arising from cross references in documents which were discovered to documents which could not be found. From that the submission proceeds as follows:
"It appears that the defendants may well have employed somebody to go through the company records to cleanse them, a decision ultimately to be made by the Court if it decides it can look at the evidence in view of the opportunity to get away with perjury which the absence of these documents created for them.
In the overall circumstances when the Court has looked at the evidence it considers admissable [sic] it will be open to the Court to decide that Mr Walsh was aware of these documents which should have been made available to the Plaintiff."