Muriniti v Lawcover Insurance Pty Ltd

Muriniti v Lawcover Insurance Pty Ltd - [2022] NSWSC 90 - NSWSC 2021 case summary — Zoe

Young litigation

As adverted to above, the Young litigation (which ultimately branched out into separate proceedings involving conspiracy allegations against Mrs Youngs' legal representatives and others), arose out of a neighbourhood drainage dispute between Mrs Young, on the one hand, and her neighbours, Mr and Mrs King, on the other, following alterations carried out by the Kings to their property in around December 2000.
Proceedings were commenced in the Land and Environment Court by Mrs Young in 2003 in relation to these alleged unauthorised works.
The dispute was initially resolved by consent orders made by McClellan CJ at LEC in 2004 (Young v King [2004] NSWLEC 93), his Honour there noting an undertaking proffered by the Kings in settlement of the proceedings.
However, in May 2008, Mrs Young, by then represented by the plaintiffs, brought an application to set aside the consent orders made by McClellan CJ at LEC (the application based on the emergence of new evidence which it was argued established that the consent orders were procured improperly).
The 2008 application spawned a veritable barrage of litigation (referred to in Young v Hughes Trueman (No 4) at [1] as a "flood of disputation" (the Young v King litigation). Relevantly, the defendants note that there have been some 14 judgments of the Land and Environment Court; subsequent appeals (see for example Young v King (No 11) [2017] NSWLEC 34 (Young v King (No 11)) from the making of personal costs orders against the plaintiffs; and a related dispute between Lawcover and the plaintiffs as to the conduct of the Young v King (No 11) appeals, said to be contrary to terms of the relevant insurance policy.
Then, in 2010, related proceedings were commenced in this Court (the Young v Hones litigation) that included an appeal to the Court of Appeal (see Young v Hones (No 2) [2014] NSWCA 338) (Young v Hones (No 2)) brought by Mrs Young against the former lawyers and engineers who had acted for her in the Land and Environment Court proceedings and had advised her as to the entry of the 2004 consent orders, in which proceedings various conspiracy allegations were made. In the course of this litigation there were two unsuccessful special leave applications to the High Court.
It is relevant to note that it appears from the submissions made by the plaintiffs in the present applications that the plaintiffs contemplate agitating claims relating to the matters that were the subject of the Young v Hones litigation against some or all of the parties previously joined to those proceedings in further proceedings yet to be commenced.
The Young litigation gave rise to a number of judgments in different courts and by different judges over a number of years (see the Exhibit to Mr Coorey's affidavit); in respect of which there was criticism of the plaintiffs' conduct. The various judgments are addressed below.
As adverted to above, Mrs Young was ultimately made bankrupt in March 2017 (apparently following unsuccessful attempts by Mrs Young to set aside bankruptcy notices issued to her by the successful defendants in the Young v Hones litigation).
Applications were also made for personal costs orders against the plaintiffs arising out of their representation of Mrs Young in the Young v King litigation.
The Young litigation is thus relevant to the present applications in two respects: first, the proposed amended statement of claim pleads that the ultimate purpose of the conspiracy between the defendants was to interfere with the capacity of Mr Muriniti and Mr Newell to prosecute Mrs Young's claims and thus impede the conduct of those claims (which presumably included those claims, since Mrs Young was not involved in the De Costi litigation); and, second, Mr Newell was the subject of applications for personal costs orders in Mrs Young's proceedings both prior to and following the decision of Suncorp not to renew Mr Newell's professional indemnity insurance.

[3]

De Costi proceedings

In August 2006, proceedings were commenced in the District Court by the fourth and fifth defendants (the two De Costi companies) against the Wachtenheim Parties. The De Costi v Wachtenheim litigation is summarised in Newell; Muriniti v De Costi (2018) 97 NSWLR 398; [2018] NSWCA 49 at [2]-[18] (Newell v De Costi).
As noted above, the plaintiffs acted for the Wachtenheim Parties in these proceedings - Mr Newell as Counsel and Mr Muriniti as solicitor. The De Costi proceedings essentially involved a franchise dispute between the two De Costi companies and the Wachtenheim Parties.
In February 2007, the Wachtenheim Parties filed a defence and cross-claim (which cross-claim is referred to in the proposed amended statement of claim as the Wachtenheim Cross-Claim). Joined as parties to the proceedings by way of the Wachtenheim cross-claim were the sixth and seventh defendants (Mr and Mrs Costi, the two directors of the De Costi companies) and the twenty-third defendant (Mr Theodore, Mrs Costi's brother and an employee of the fourth defendant, De Costi Holdings). Subsequently, in January 2008, the twelfth defendant (Mr Shnider, Mr Wachtenheim's brother-in-law and accountant) was joined as a cross-defendant to the Wachtenheim cross-claim: De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 4) [2014] NSWDC 70 (De Costi (No 4) at [1].
The De Costi Parties were represented in those proceedings by Mr Andrew Thorpe, solicitor, and Mr Thorpe's employed solicitor, Ms Juliana Ng (collectively, the De Costi Solicitors). They in turn briefed Mr Stephen Stanton and Mr Michael Holmes (collectively, together with the De Costi Solicitors, the De Costi Lawyers).
Mr Shnider was separately represented in those proceedings by Ms Deborah Searle, solicitor, and Mr Philippe Doyle Gray, barrister.
Mr Shnider became bankrupt on 7 October 2011 and thus took no further part in the proceedings.
On 12 December 2011, judgment was delivered in favour of the De Costi companies in respect of their substantive claim. However, enforcement of the judgment was stayed, pending determination of the Wachtenheim cross-claim.
On 1 February 2012, the Wachtenheim cross-claim as it related to Mr Shnider was dismissed by consent (with no order as to costs) by Johnstone DCJ, as his Honour then was.
The hearing of the Wachtenheim cross-claim (by that stage by way of a sixth further amended cross-claim) commenced before Taylor SC DCJ on 12 June 2012 and occupied some 75 sitting days (see proposed amended statement of claim at 31 and De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 6) [2016] NSWDC 378 (De Costi (No 6)) at [119]).
On 3 May 2013, Taylor SC DCJ dismissed the remainder of the Wachtenheim cross-claim in the De Costi proceedings with costs (De Costi Seafoods (Franchises) v Wachtenheim (No 3) [2013] NSWDC 54) (Wachtenheim Judgment) (see proposed amended statement of claim at 31) and ordered costs against the Wachtenheim Parties. (Pausing here, I note that in the proposed amended statement of claim the plaintiffs refer to the De Costi proceedings as the Wachtenheim Proceedings - see at [31] (the second of two paragraphs numbered 31) of the proposed amended statement of claim.)
The De Costi Parties sought a variation of the costs orders that had been made, relevantly seeking orders pursuant to ss 345 and 348 of the Legal Profession Act 2004 (NSW) (Legal Profession Act) (the so-called "wasted costs" jurisdiction) and s 99 of the Civil Procedure Act that the plaintiffs be ordered to pay the costs of the proceedings personally. On 5 August 2013, a costs application was filed by the De Costi Parties (De Costi Costs Application) (which seems to be the costs application referred to at [25] of the proposed amended statement of claim) to that effect.
Ms Louise Thomson was appointed as trustee to Mr Shnider's bankrupt estate for the purposes of prosecuting a costs application on behalf of the bankrupt estate (Trustee Costs Application) which was filed on 14 October 2013. Relevantly, the Trustee Costs Application sought the setting aside of the consent orders made by Johnstone DCJ on 1 February 2012 and then for the dismissal (again) of the cross-claim against Mr Shnider but this time with an order that the Wachtenheim Parties pay Mr Shnider's costs of the cross-claim against him on the indemnity basis: see De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 4) [2014] NSWDC 70 at [6]. The Trustee Costs Application also sought personal costs orders against the plaintiffs of the kind sought by the De Costi Parties. (Where I refer to the two costs applications collectively, I do so as the Costs Applications.)
The Costs Applications, insofar as they related to Mr Muriniti, resulted in a notification to his professional indemnity insurer, Lawcover, whose corporate counsel, Ms Elissa Baxter, had responsibility for management of the claim. Lawcover appointed Mr Bruce Yeldham and his employed solicitor Ms Mary Vitalone (collectively, the Lawcover Solicitors) who in turn briefed Mr David Lloyd of counsel (collectively, together with the Lawcover Solicitors, the Lawcover Lawyers) to act in Mr Muriniti's interests in respect of the Costs Applications.
The Costs Applications, insofar as they related to Mr Newell, resulted in notification to his professional indemnity insurer, Suncorp (AAI Limited). Suncorp appointed Ms Wendy Blacker and her employed solicitor, Mr Rory O'Connor (the Gadens Lawyers) to act in Newell's interests in respect of the Costs Applications. Subsequently (upon Ms Blacker and Mr O'Connor moving to Barry Nilsson Lawyers - a matter to which the plaintiffs apparently attach some suspicion - see T 176.45; T 177.1-2), Mr Nicholas Andrew (collectively, together with Ms Blacker and Mr O'Connor, the New Suncorp Lawyers) was appointed as the solicitor on the record for Newell with respect to the Costs Applications. Various counsel were briefed to appear in Mr Newell's interests at different stages of the Costs Applications. Ultimately, Mr Geoffrey Watson SC was briefed to appear at the first instance hearing, and subsequently on appeal, in relation to the final determination of the De Costi Costs Applications.
Directions were made by Taylor SC DCJ as to the hearing of the Costs Applications. Relevantly, his Honour listed for hearing first (on 16-17 December 2013) the question whether the evidence gave rise to the presumption under s 349 of the Legal Profession Act in respect of the claims that had been made against the De Costi Parties; and, as to the Trustee Costs Application, the application to set aside Johnstone DCJ's consent orders and for an order that the Wachtenheim Parties pay Mr Shnider's costs of the cross-claim against him on an indemnity basis. The further orders sought by the trustee (i.e., that the plaintiffs, pursuant to s 348(1)(b) of the Legal Profession Act and s 99(2)(c) of the Civil Procedure Act, indemnify the bankrupt estate of Mr Shnider in respect of any costs payable by Mr Shnider or the bankrupt estate of Mr Shnider in respect of the cross-claim) were to be dealt with later (referred to by the plaintiffs as the residual trustee costs claim).
On 13 June 2014, in De Costi (No 4) Taylor SC DCJ dismissed the Trustee Costs Application (other than the residual trustee costs claim). In relation to the De Costi Costs Application, his Honour found, for the purposes of the s 348 application, that a rebuttable presumption for the purposes of s 349 of the Legal Profession Act arose in respect of the claim against Mrs Costi, but not as against the other De Costi Parties. (Pausing here, there was thus a measure of success for the plaintiffs in defending the Costs Applications to this point.)
Mr Newell and Mr Muriniti subsequently brought an application for summary dismissal of the De Costi Costs Application (other than the claim brought in respect of Mrs Costi's costs).
On 10 February 2015, in De Costi Seafoods (Franchises) Pty Ltd v Wachtenheim (No 5) [2015] NSWDC 8 (De Costi (No 5)), Taylor SC DCJ dismissed the application for costs under s 348 of the Legal Profession Act except insofar as it related to Mrs Costi, and otherwise dismissed Mr Muriniti and Mr Newell's applications for summary dismissal. This left for determination the application for costs under s 348 of the Legal Profession Act with respect to Mrs Costi, and the applications under s 99 of the Civil Procedure Act in respect of all the De Costi Parties (as well as the residual trustee costs claim).
On 14-18 March 2016, the De Costi Parties' claim for personal costs orders under s 99 of the Civil Procedure Act was heard, including the issue as to whether the plaintiffs could rebut the finding concerning the existence of reasonable grounds for the joinder of Mrs Costi. At the hearing in March 2016, Mr Watson SC appeared as counsel for Mr Newell, then instructed by the New Suncorp Lawyers.
Mr Coorey deposed that following the refusal by Taylor SC DCJ to dismiss the balance of Ms Thomson's (the Trustee) application, Ms Thomson indicated an intention not to pursue the residual costs claim against the plaintiffs.
On 16 December 2016, Taylor SC DCJ handed down judgment on the De Costi Costs Application (De Costi (No 6)) (De Costi Costs Judgment). His Honour held that the plaintiffs had not rebutted the presumption in s 349(1) of the Legal Profession Act (see at [14]), that the power in s 348(1)(b) of that Act should not be restricted to an order only in favour of Ms Costi (see at [27]), upheld a significant number of the De Costi Parties' complaints under s 99 of the Civil Procedure Act (see at [48], [53], [55]-[56], [71], [77], [80]-[81], [84], [87] and [93]); and held that personal costs orders on the basis of a global assessment of 50% of the De Costi Parties' costs of the cross-claim were appropriate (see at [124]). His Honour ordered that Mr Newell and Mr Muriniti indemnify the De Costi Parties against 50% of their costs payable with respect to the Wachtenheim cross-claim pursuant to s 99 of the Civil Procedure Act; and that Mr Newell and Mr Muriniti indemnify the De Costi Parties in respect of 20% of the costs payable on account of the costs occasioned by the claim against Mrs Costi pursuant to s 348 of the Legal Profession Act (see at [125]).
In finding that that the s 349 presumption was not displaced in relation to Mrs Costi's costs, his Honour noted that Mr Newell and Mr Muriniti did not give evidence on the application and, in accordance with Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8, his Honour inferred that their evidence could not have assisted with their case (the advice by Counsel for Mr Newell not to give evidence forms part of the complaints made in the proposed amended statement of claim). His Honour held that none of the other materials relied upon established a foundation for an arguable case of unconscionable conduct against Mrs Costi. His Honour held that s 348(1)(b) was limited to costs connected with the baseless claim against Mrs Costi, and it was immaterial that she did not personally pay those costs; that the claim against Mrs Costi was not trivial; that the costs of the claim should be treated as an equal portion of the whole of the costs of the proceedings (i.e., one-fifth or 20% of the costs of the cross-claim against the De Costi Parties).
His Honour found that an order under s 99 of the Civil Procedure Act was appropriate in circumstances where the De Costi Parties had incurred costs by reason of the following serious neglect, serious incompetence or serious misconduct of Mr Newell and Mr Muriniti: in the absence of explanation, the repeated serving of amended pleadings ultimately resulting in the filing of the fifth further amended statement of cross-claim; that the pleadings were inconsistent with the particulars and were riddled with ambiguity and prolixity, where no exculpatory explanation is provided; the maintaining of a cause of action that had no evidence to support it; the excessive number of affidavits of Mr Wachtenheim that were read in the proceedings; the significant volume of evidence concerning other franchise stores that was not probative to the issues in the trial; the involvement in the preparation of a false affidavit and instruction of expert to "cover up" dishonesty (these being matters the subject of complaint in the proposed amended statement of claim); inappropriate dealing with witnesses (this being a reference to an illegal tape recording incident with Mr Shnider, and improper dealings with a witness, Mr Kevin Ng, again those being matters of complaint in the proposed amended statement of claim); and the making of serious allegations of impropriety without a proper basis.
Mr Newell and Mr Muriniti then brought an appeal from the De Costi Costs Judgment (they say on the instructions of Suncorp and Lawcover). In Newell v De Costi the Court of Appeal (Beazley P, as Her Excellency then was, Gleeson JA agreeing) upheld the conclusion by Taylor SC DCJ that this was an appropriate case in which each of Mr Muriniti and Mr Newell ought be required to indemnify the De Costi Parties in respect of some of their costs of the substantive proceedings, but that his Honour had erred in quantifying or describing the extent of that indemnity.
In particular, in the course of her Honour's reasons it was held that: his Honour was correct in finding that Mr Newell and Mr Muriniti were liable to the De Costi parties on account of costs occasioned by the claim against Mrs Costi pursuant to s 348 of the Legal Profession Act, but erred in his determination that the costs of the claim against Mrs Costi should be treated as an equal portion of the whole of the costs of the proceedings. It was held that his Honour erred in determining that Mr Newell and Mr Muriniti were equally liable for each instance of the impugned conduct; that his Honour was required, but failed, to make specific findings in respect of the responsibility of each of Mr Newell and Mr Muriniti for the relevant conduct (see at [228]-[232] and [253]-[257]).
The Court of Appeal made declarations to the effect that each of Mr Newell and Mr Muriniti was liable to indemnify the De Costi Parties (see at [239]).
In the case of both Mr Newell and Mr Muriniti, this was by reason of the following matters: the joinder of Mrs Costi as cross-defendant; the filing or service of more than three versions of the cross-claim; the failure to reduce the evidence in the various affidavits of Mr Wachtenheim to one affidavit or at least many fewer affidavits than those served; the making and deployment of, and the submissions and hearing in respect of, the illegal tape recording that was the subject of the second judgment in the District Court in De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 2) [2012] NSWDC 286 (De Costi (No 2)), including the costs of the application dealt with in De Costi (No 2); the failure to discover correspondence between Mr Newell, Mr Muriniti and Mr Shnider; the affidavit of Mr Ng; the allegations of impropriety against Mr Thorpe; and the allegations of impropriety that the respondents had obtained a misleading affidavit from Mr Shnider and Mr Shnider's evidence (see at [239]).
In addition in respect of Mr Muriniti, the Court of Appeal also referred to the following matters in the declaration of his liability to indemnify the De Costi Parties: the instructions given by Mr Muriniti to Mr Dent; the false account contained in Mr Wachtenheim's affidavit dated 15 December 2011 as to how he was alerted to the issue of the understatement of sales revenue in Mr Wachtenheim's affidavit dated 23 August 2011; and the non-production of a diary indicated by the chronology of events forwarded by Mr Muriniti to Mr Dent.
The Court of Appeal remitted the proceedings to the District Court for determination of the costs allegedly wasted by reason of the conduct the subject of the declarations. Pausing here, personal liability for costs falling within the categories identified in the declarations made has thus been established; the only remaining question (absent the setting aside of the Court of Appeal decision as based upon fraud) could be the quantum of those costs (and the apportionment as between Mr Newell and Mr Muriniti of responsibility for those costs). Hence the complaint by the defendants that what the plaintiffs here seek to do is impermissibly to re-litigate the matters that have been resolved by the Court of Appeal. The plaintiffs' response to this is that no question of re-litigation arises because the relief they seek includes setting aside those orders as having been obtained by collusion (see at T 22.1-6).
Following the remittal to the District Court, on 20 March 2019 Taylor SC DCJ made orders appointing a Referee (to be nominated by the President of the Law Society), to assess the alleged wasted costs (the costs reference), following which, on 30 April 2019, Ms Alyson Ashe was nominated as referee: see, for example De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 8) [2020] NSWDC 184 (De Costi (No 8)) at [6] and [11].
What followed thereafter has been the subject of much complaint by the plaintiffs (and I was taken through the correspondence in relation to this in some detail). Indeed, Mr Newell made clear that the plaintiffs have attached great importance to the costs reference for the reason that they say half of their case depends on the outcome of the reference (T 19.38). At T 26.22-25, Mr Newell explained this further, saying that half of the case turns on whether the s 99 conduct was upheld (which, I interpose to note, it clearly was - though the plaintiffs seek to set aside those judgments for fraud) and the other half turns on whether the s 99 conduct had ever carried with it a significant waste of costs.
Mr Newell says (see at T 19ff) that: … The plaintiffs contend that by reason of the conduct complained of by the plaintiffs, which the plaintiffs allege was collusion sponsored by the two insurers and their legal representatives, the conduct findings were made which ought never have to been made on the known evidence. That is one part of the matter. The second part of the matter, the flip side of the coin, is that the conduct complaints we say did not result in any significant wasted costs, and when, as we believe but cannot yet plead for reasons I'll take your Honour to, the costs would be shown to be in most cases de minimis, if not non‑existent. … We expect them not to be significant but we don't wish to plead that because we'd be stepping on Taylor DCJ's toes. It's not a matter ‑ we can't go off to the Supreme Court and plead what Taylor DCJ should be doing and we've emphasised that to the defendants, and we haven't ‑ our concern is we haven't got a response that suggests that's been understood. There are cases where there might be wasted costs but nonetheless we're seeking to have those ‑ it might be built into the Court of Appeal's orders that there are wasted costs but your Honour should bear in mind that the plaintiffs are seeking to have those orders set aside as having been obtained by fraud, so that those orders ultimately will not be binding, in our respectful opinion.
Relevantly, Mr Newell says that the plaintiffs have been "exacting" as to how the reference is conducted "so as to ensure that evidence is preserved for the very proceedings that have been commenced in this Court" (T 25.30). It is said that the plainitffs have considered at all material times that it was essential to prove the case that the de minimis nature of the wasted costs categories be shown (and that the plaintiffs have resisted a settlement by the insurers - which I note also forms part of the conduct complained of in the proposed amended statement of claim - so that the "evidence does not disappear in the settlement") (T 25.31-35). At T 26.28-29, Mr Newell said that one of the reasons that the reference was protracted was that the plaintiffs "were astute to conduct the reference, with regard to making absolutely certain that those costs were assessed accurately" and that they want it done meticulously. (At the same time, and seemingly inconsistently, the plaintiffs say that they have drawn a conclusion that the protracted nature of the reference is due to an anxiety on the part of certain parties, in particular the De Costi Parties not to have the reference completed (T 27.33-35).)
Returning to the chronology of events, as noted the referee was appointed in April 2019.
On 14 August 2019, the plaintiffs filed a motion seeking termination of the reference and termination of the appointment of the independent costs assessor. It is said that this was because of some concerns the plaintiffs had with the referee's conduct and with the conduct of the De Costi Parties. That motion was heard by Taylor SC DCJ. It was unsuccessful: De Costi (No 8).
Following the determination of that notice of motion, it appears that by April 2020 Mr Newell became concerned that there might be a limitation problem for the present proceeding because the letter he had received from Suncorp declining to renew his insurance was dated 24 April 2014. Mr Newell says that, on one view of the matter, he would not have suffered any loss until 30 June 2014 (when he was without insurance), but that it occurred to the plaintiffs that this might not be correct if it were to be argued that, as at 24 April 2014, the damage was inevitable (see T 26.1-2). This led to the commencement of the present proceedings by the filing of the original statement of claim on 22 April 2020 (see below), a document said to have been prepared in great haste. The statement of claim was not served until September 2020.
Before turning to the present proceedings, it is helpful to conclude the chronology of events in relation to the costs reference (as they stand at present).
On 1 February 2021, the referee sent an email requesting that by 8 February 2021 both parties indicate the present position as to advancing some signed directions and, for the costs applicants, their progress towards the costs claim. (The plaintiffs rely on this to show that nothing had been done to indicate progress.) The response by the costs applicants was to explain the delay by reference to the solicitor's involvement in another complicated matter (an explanation one might think the plaintiffs would understand since their explanation for delay in the present proceedings included reference to their involvement in other matters - i.e., the District Court proceedings and costs reference) and to indicate that the applicants would respond by mid-April 2021. The plaintiffs say that the inference to be drawn is that nothing had been done on the costs reference (T 30.28-29); and note that the referee's response to that was that this was inadequate.
The plaintiffs then wrote a lengthy letter apparently pressing the referee to ask the costs applicants whether their solicitors were actually acting in the matter. The plaintiffs perceived there to be an obvious conflict (presumably because the solicitors were those against whom the present conspiracy applications are made) and that no work had been done. Mr Newell said that they were "in some doubt that the matter could progress and … wanted an assurance that they were actually solicitors intending to act" (T 31.7-8). The referee's response was that the plaintiffs should seek to re-list the matter in view of the non-progress.
The plaintiffs then wrote to the referee complaining that they had been unable to obtain answers to their questions "about certain indications of the methodology to be applied by the referee" and in particular that there was no explanation for a statement that a lump sum methodology was to be applied and "that there was antipathy by the referee to get bogged down in a particularised cost assessment" (T 31.14-19). (Pausing here, a particularised costs assessment (descending into the minutiae) seems exactly what the plaintiffs want, insofar as Mr Newell informed me that "the plaintiffs were concerned that the question of what the precise costs were would not be glossed over to the detriment of intended proceedings" and said that therefore they were exacting in seeking explanations for the methodology (T 31.21-23) but those were never received.)
The referee then sent a short report to Taylor SC DCJ requesting that the proceedings be relisted and the plaintiffs reiterated their concern to know whether the costs applicants' solicitors were actually acting. The concern Mr Newell expressed was that if there was "suddenly going to be a claim" that the solicitors could not act then this would delay completion of the reference (see T 31.37-38). The plaintifs then corresponded with the defendants as to the status of the reference.
On 2 March 2021, the matter was listed before Taylor SC DCJ. Mr Newell says that the plaintiffs raised their concerns "including the concern that they didn't know whether the reference would be delayed by the sudden decision that the … costs applicant's solicitors could not act" (T 32.1-2). His Honour made directions for a timetable for the costs applicants to submit their claim and supporting documents by 30 April 2021 and for the plaintiffs to respond to the claim. An order was made that, failing the claim being filed by the date specified the plaintiffs have leave to file a motion to have the costs application dismissed for want of prosecution.
On 1 April 2021, the plaintiffs wrote to the defendants in the present proceedings as to the delay in the costs application progress (which was attributed to the De Costi Parties), and in this letter the plaintiffs explained why they would be seeking a stay of the proceedings; and the difficulties they had.
On 30 April 2021, the De Costi Parties served a large volume of documents that they said comprised their claim. On 20 May 2021, the plaintiffs indicated to the referee that they were concerned about the form of the claim and (perhaps ironically, given their concern to preserve all the evidence in relation to the claim) the difficulties they were having with regard to the volume of the material that had been served. On 11 June 2021, the plaintiffs made submissions to the referee as to the contents and form of the claim and what they said they needed to respond to and there was then corrpoesndence in which the plaintiffs pressed for directions from the referee "to place the claim in a shape that could be understood and responded to" (T 33.26-27). Part of the complaint was that there were no costs agreements included in the claim materials.
The plaintiffs say that on 16 June 2021 the De Costi Parties "purportedly" provided the cost agreement material that it is said should have been provided when the claim was first brought in August 2013. One of the complaints by the plaintiffs (conveyed to the McLachlan Thorpe lawyers on 17 June 2021, and said to be the subject of the motion filed by Mr Muriniti in September 2021 in the District Court proceedings) related to the lack of a cost agreement "justifying" the fees of the ninth defendant (Mr Stanton) in the present proceedings.
There was further correspondence about the cost agreements material; and ultimately it appears that the plaintiffs were satisfied as to the adequacy of the material other than in respect of the ninth defendant (T 33.49-50). In relation to the ninth defendant, reference was made to a letter dated 25 May 2012 from Mr Stanton to the solicitors for the cost applicants referring to a private arrangement which the plaintiffs consider indicates a collateral agreement inconsistent with his cost agreement. The plaintiffs pressed for a statement (if no documents could be produced) as to the alleged terms of the cost agreement (and say that this is sought in Mr Muriniti's motion of 22 September 2021). On 24 June 2021, the plaintiffs complained to the referee about about the non‑production of the cost agreements and sought a direction that cost agreements be provided. (The relevance of this is said to be that the protacted delay of the reference is due to what is alleged to be the "recalcitrance" of the costs applicants in putting forward any costs claim for a lengthy period and ultimately for putting forward a claim without the adequate material for such a claim (T 34.41-43).)
On 25 June 2021, the costs applicants then confirmed that enquiries had been made as requested and that no further cost agreements could be produced; and the plaintiffs then complained to the referee that there had been no articulation of the terms of the cost agreement that Mr Stanton had in place.
On 28 June 2021, the referee indicated a willingness to make certain directions which were made on that same date. The plaintiffs were unhappy with those directions and pressed the referee to consider their request for directions. On 30 June 2021, the referee indicated she would consider those directions and the plaintiffs put forward a lengthy letter setting out what directions were sought. The cost applicants provided their response to the proposed directions. The plainitffs complained again and foreshadowed the filing of a notice of motion.
In particular, the plaintiffs explained that one of the principal concerns was that the cost applicants had not put forward any claim as to why the work was reasonable necessary and that the De Costi Parties were suggesting that this could be done at a later stage. The complaint by the plaintiffs was that the result of that would be to frustrate the scheme of the directions made by Taylor SC DCJ because the plaintiffs did not know how it was contended that certain work was actually reasonably necessary (and that, if the plaintiff found this out at the reply stage, this would create "a black hole as to what was going to happen" and as to whether or not submissions would start again (T 35.46-49)).
The plaintiffs pressed the referee for a "robust" response to the cost applicants' position; and complained that it did not make sense for the plaintiffs to put forward a response before a claim had been framed.
On 30 July 2021, the referee made detailed directions (about which Mr Newell said that "to a point" the plaintiffs were happy) but the plaintiffs complained in two letters, both of which were sent on 2 August 2021, that it did not make sense that the costs applicants were to respond within one month but the plaintiffs would file their response (also) within one month (which they said meant they would be filing a response to a claim which had not been made).
On 11 August 2021, the solicitors for the cost applicants sought clarification of the directions (which the plaintiffs maintain were not in any way unclear). The plaintiffs now complain (and this is apparently also the subject of the motion to be heard on 3 February 2022) that the cost applicants were setting up a misunderstanding of the directions so as, once again, not to put forward their claim in the form in which the plaintiffs say that it should have been put forward.
The referee then provided a response to the request for clarification of the directions (about which the plaintiffs have expressed concerns about "the way the matter was left").
In response to the plaintiffs' foreshadowing of a notice of motion, the cost applicants wrote on 27 August 2021 to the effect that they would be wasting costs putting forward their claim if a motion were to be filed; a proposition that the plaintiffs cavil with, in that they say that the simple answer was to get their claim filed quickly (T 36.49-50; 40.1). Mr Newell says that the "purport of that step" was that the costs applicants never intended to put forward their claim.
The next step was then the filing of the plaintiffs' notice of motion on 22 September 2021 (listed to be heard on 3 February 2022 in the District Court) seeking directions for the De Costi Parties to comply with certain directions of the referee made on 30 July 2021.
The plaintiffs rely on the above sequence of events as evidencing their insistence that the claim be put forward in a shape that could properly be scrutinised and say that it "became a problem just to advance it at all" (T 37.20-21). Their complaint in the notice of motion is that there has not been compliance with the directions of the referee.
The plaintiffs make much complaint on the present applications on the fact that, some two and a half years after the referee was appointed, the costs reference has not been completed and final orders have not been made in respect of the De Costi Parties' Costs Application against the plaintiffs, from which the plaintiffs draw the inference that the costs applicants are aware that there have been no significant wasted costs and that they are deferring the progress of the costs reference (as part of the conspiracy to prevent Mr Newell from practising as a barrister).
Pausing here, it would seem to me from the above that at least some of the delay in the determination of the costs referee (and hence of the ultimate determination by Taylor SC DCJ of the costs issue) is referable to the conduct of the plaintiffs in the course of that referral - indeed, in oral submissions Mr Newell appeared at first to attribute some of the delay to the fact that the plaintiffs had been exacting in their insistence that there be a meticulous assessment process in order to ensure that all the evidence be preserved (see for example at T 26.30 where he said that one of the reasons that the reference was protracted was because the plaintiffs want it done meticulously). Certainly, the litany of complaints made of the referee (and motions in relation to the referee and as to the conduct of the reference) cannot have assisted in minimising any delay in the costs referral process or, conversely, in expediting that process. However, the position of the plaintiffs appears to be that blame for the delay lies squarely at the De Costi Parties' door (as I will explain in due course), accusing the De Costi Parties of recalcitrance in putting forward their costs claim (see at T 34.42); and as noted, the delay in progressing the costs reference, forms part of the conspiracy allegations alleged by the plaintiffs.
For completeness, I note that, although it is not altogether made clear, the reference to the "de Costi Cost Application" in the proposed amended statement of claim (see for example, at [25]) appears to be a reference to the motion brought by the De Costi Parties on 5 August 2013. Again, although it is not made clear in the proposed amended statement of claim, the reference to the "Shnider Costs Application" (see for example, at [23] of the statement of claim) and the term "Trustee Costs Claim" in the proposed amended statement of claim (see for example at [23]) appears to be a reference to the motion brought by Ms Thomson as the trustee of Mr Shnider's bankrupt estate on 14 October 2013 which was materially the same as the De Costi Parties' August application.

[4]

Present proceeding

Meanwhile, as noted on 22 April 2020 the plaintiffs filed the initial statement of claim in the present proceeding though it was not served until 11 September 2020 at the earliest (some parties being served later), not long before it would have become stale.
The plaintiffs make clear in their submissions on the present applications that the pleading was prepared and filed in order to avert a potential statute of limitations argument by the defendants. They submit that in late April 2020 (having, they say, been fully occupied in trying to conduct the costs reference) they were "confronted with the predicament that there was a possibility that a limitation problem could develop". It is submitted at [17] of the plaintiffs' submissions that: … At the same time, the District Court costs proceedings on which the Plaintiffs' contemplated action was based, had not been fully litigated. Final orders had not been made. The facts produced by the Reference were expected to be a large part of the foundation for the contemplated Equity Division Proceedings. That is because the Plaintiffs believed that the conduct informing many of the declarations made by the Court of Appeal did not occasion any or any significant wasted costs. In the premises, the outcome of the District Court proceedings was [expected to] provide a large part of the Plaintiffs' claim to be pleaded that the de Costi costs application was maintained for a collateral purpose and assisted by collusion. Put simply, half of the contemplated claim could not be pleaded because the matter was under still consideration [sic] by the District Court. Further, a vital tranche of evidence supporting the Plaintiffs contemplated claim concerned the events which occurred and were occurring during the course of the Reference.
The plaintiffs say that the statement of claim was prepared and filed in great haste (see at [22] of the plaintiffs' submissions, referring to the affidavit of Mr Muriniti sworn 31 August 2021 in which he deposes to the District Court proceedings occupying a great deal of attention and time), though the defendants here point out that much of the matters the subject of the present proposed pleading have been known by the plaintiffs for quite some time.
The plaintiffs submit that they could not plead the outcomes (of the cost reference); and could not plead contentions about the claims before Taylor SC DCJ, as that would involve agitating in the Supreme Court matters still properly before Taylor SC DCJ for consideration; and that this would amount to an obvious abuse of process. Hence the plaintiffs say that even now they are not able to put forward a proposed amendment which contains the case which they expect to take to trial (and, significantly for the present application, they made clear that the proposed amended pleading is not the one that they want to prosecute in this proceeding) (see for example at T 39.35-50)).
As explained in oral submissions, Mr Newell put the position thus (at T 38-39): Well, the statement of claim will not contain any pleading about the conduct of the reference, the conduct of the parties to the reference, its implications for the overarching allegations, and the results of the reference from which it will be inferred, we hope, that the costs are actually de minimis. Of the particular items of conduct, the subject of the Court of Appeal's declarations, and that is the flip side of the coin of whether the conduct should have been found at all. The question is, is it an illusory claim in the sense that the costs are so minimal that it begs the question how the claim was protracted for so many years. The reason I say that is because Taylor DCJ had made a decision on 13 June 2014 which left the matters that are now complained of as the only matters to be decided. On 13 June 2014 if the matter had been abandoned, based on Taylor DCJ's judgment which we say gutted the claim, then Mr Newell would have had no difficulty obtaining insurance by 30 June because the claim had been effectively abandoned. Now, we say that would follow as day follows night. After 13 June 2014 the claim continued to be progressed for another three or four years, and it's now been progressed through the reference in a very delayed state. Probably we say that the ‑ if it transpires that the s 99 matters attract only the most de minimis costs, it would confirm that the proper commercial course, and the only course properly in the interests of the cost applicants ‑ sorry, the de Costi parties ‑ was to abandon the claim from and after 13 June 2014 when Taylor DCJ's decision virtually said there was nothing in it. So one of the fundamental questions that goes to the purpose of the matter is why it was perpetuated after that time. It's got two features. One is that the conduct itself was, properly understood, should not have been made out, and secondly, the conduct did not attract any significant costs. So the question of whether there's de minimis costs goes to the question of whether the proceedings were protracted after 13 June 2014, remembering your Honour that Mr Newell's insurance expires on 30 June 2014, and as pleaded Mr Newell wrote to Suncorp to say, in light of this judgment, perhaps he would like to reconsider your non‑renewal decision, and it's pleaded that an unsatisfactory response to that request occurred.
Thus it is submitted that the plaintiffs are not capable of pleading all of the circumstances which support the claim, including "what we expect to be the manner of reference and the connected matter of the de minimis nature of the costs that were the subject of perpetuation of the claim from June 2014 to the present time". The defendants, however, point to communications around the time of the filing of the initial statement of claim which indicate not only that the plaintiffs recognised the need to amend the statement of claim as early as 15 May 2020, but also that steps were apparently being taken to attend to this at that time.
In particular, it is noted that Mr Muriniti made the following request in the Online Court in this matter on 15 May 2020 (see Ex 1, p 783): Given the large number of Defendants involved and the complexity of the present proceedings (and the proposed additional proceedings) and the fact that the proceedings presently before the Court require the Statement of Claim to be amended (which is presently being attended to) and that none of the parties have yet been served, we request that the matter be stood over for directions for a period of 4 weeks. [Emphasis as per submissions]
It is also noted that, on 15 June 2020, Mr Muriniti told the Court that the "proceedings in question are extremely complete [sic]"; that an additional six weeks (i.e., to mid-August 2020) were required to "complete amending the Statement of Claim before it can be served"; and that that task had not been completed because of "a number of other professional commitments", because it was "much more demanding and time consuming" than anticipated, and due to illness (see Ex 1, p 784).
On 11 September 2020, service of the initial (unamended) statement of claim was effected by email on various of the defendants. Both sides have referred to the covering letter from Mr Muriniti with which the pleading was served, which stated: We refer to the above matter. We enclose by way of service a statement of claim. The circumstances are that the Statement of Claim was filed because it appeared that it might be necessary for abundant caution to protect time, notwithstanding that the claim is in fraud and the cause of action was concealed. The need to protect time was perceived as necessary notwithstanding that the circumstances giving rise to the claim have not settled. It is our position that the Statement of Claim (in its present form) requires significant amendment. An assessment of costs claimed by the de Costis is presently being undertaken pursuant to a reference order by his Honour Judge Taylor following the remittal to his Honour from the Court of Appeal. The result and the evidence produced by that referral process will be central to the case as it is intended to be pleaded. As such it is our position and we will contend as such, that we are not in a position to prepare a pleading at this point in time in the form intended to be taken to trial. We propose to address this predicament by a proposed stay in the proceedings until final orders are made in the matter before His Honour judge Taylor. The stay application will give the court an opportunity to consider the best course in view of both common sense and section 56 CPA. As is obvious, the underpinning of the claims in the instant proceedings is the alleged conspiracy to defraud Mrs. Young. That matter is presently the subject of negotiations with the trustee in bankruptcy for Mrs. Young with a view to assignment of the cause of action. We would expect those proceedings to be filed before the Reference before Judge Taylor is completed. So as to avoid inconsistent judgments, it appears that the circumstances require that the proceedings arising out of the fraud on Mrs. Young should be heard with the instant proceedings or concurrently or immediately before the instant proceedings. In any event the fact of a proven conspiracy against Mrs Young is forensically central to the claim made in the instant proceedings. Directly connected to the Young claim are judgments for personal costs orders against Mr. Newell and Mr. Muriniti which it is alleged were obtained by fraud and ought properly to be set aside. The impetus for the fraudulent procurement of those personal costs orders is the fact of a need to prevent the Young claim being litigated and the attempt to defraud her being litigated. The proceedings are accordingly complicated and as a consequence we will be seeking the guidance of the court, inter alia, for their progression. The instant case is before the Court on 22 September 2020. In light of the matters outlined in this letter we do not propose to advance the proceedings at this time. On the 22 September 2020 or shortly thereafter we will (and certainly when all of the parties have appeared) file a motion seeking a stay of the instant proceedings in reliance upon the circumstances set out herein. In the circumstances, there is no immediate need for the parties to incur unnecessary costs. We are happy to mention the appearances of the defendants by agreement on 22 September 2020. [My emphasis]
A number of things may be noted from this correspondence: first, that the plaintiffs were well aware of the extended limitation period for claims of fraud and that what they were pleading amounted to a claim based on fraud; second that the statement of claim required substantial amendment and was not a pleading in the form intended to be taken to trial; third, that the plaintiffs were anticipating relying on "evidence produced" by the costs reference; fourth, that the "underpinning of the claims" in the present proceeding was the alleged conspiracy to defraud Mrs Young (which was a matter the subject of negotiation for the assignment of the cause of action by Mrs Young's trustee in bankruptcy and contemplated to be the subject of yet further proceedings); and last, but not least, there was a positive avowal of an intention not to advance the proceedings at that time.
It should be noted that, although the 11 September 2020 letter referred to negotiations then on foot with Mrs Young's trustee for bankruptcy as to the assignment of a cause of action arising out of an alleged fraud on Mrs Young (as part of the context in which it was suggested that parties agree to a stay of the present proceeding), Mr Newell made clear in oral submissions on the present applications that the assignment of this cause of action is not something that would preclude the present proceeding being prosecuted; rather, his submission appears to be that it would be preferable - to avoid inconsistent judgments - for that (still yet to be assigned) cause of action to be heard together with the present proceeding. In oral submissions, Mr Newell made clear that the only thing that precludes the ongoing conduct of the proceeding at this stage is the fact that the costs reference (and hence the costs application in the District Court) has not yet been concluded.
On 18 September 2020, Mr Muriniti applied for a directions listing for the proceeding on 9 November 2020 "in order that the Statement of Claim which was filed to protect time can be amended to contain 'inter alia' a significant amount of particulars" (see Mr Coorey's affidavit Ex 1, p 837).
On the same day, Sparke Helmore (the solicitors acting at that time only for the Lawcover defendants) wrote to Mr Muriniti, raising a number of difficulties with the then pleaded claim (see Ex 1, pp 831-6), including that: the pleading disclosed no cause of action against Ms Baxter; Sackar J had already considered, and dismissed, the plaintiffs' allegations of bad faith (in Lawcover v Muriniti [2017] NSWSC 1557 at [201]); there was no basis for an allegation that Lawcover owed and breached a duty of good faith owed to Mr Newell at relevant times (Ex 1, p 834 at [17]); and asserting that the non-existence of the "Young conspiracy" had already been conclusively determined in no fewer than 12 judgments of the New South Wales Land and Environment Court, the Federal Court of Australia, and the New Sout Wales Court of Appeal (Ex 1, p 835 at [19]-[20]).
Also that day, the solicitor for the Suncorp defendants, Mr Berg of DLA Piper, sought particulars of the three matters put forward by Mr Muriniti in his 11 September 2020 letter in connection with the plaintiffs' proposal that the proceedings be stayed (i.e., that the statement of claim required significant amendment; that the result and the evidence produced in the costs reference would be central to the case to be pleaded; and that other proceedings, yet to be commenced, would be highly material to the present proceeding). The Suncorp defendants point out that no substantive response to this letter was provided.
On 9 October 2020, Mr Berg wrote to Mr Muriniti seeking further and better particulars of the claims against each of the Suncorp defendants. No such particulars were provided.
On 14 October 2020, Mr Berg again wrote to Mr Muriniti following-up his letter dated 18 September 2020, and asking when the plaintiff would be in a position to provide a draft amended statement of claim (in circumstances where there was said to be no apparent reason why it could not be provided forthwith given the length of time that had elapsed). Again, no substantive response to this letter was provided.
On 23 February 2021, the plaintiffs filed and served an affidavit sworn by Mr Muriniti on that date, deposing to information as to the status of progress of the District Court costs reference.
Lawcover filed its notice of motion on 23 February 2021 seeking orders that the plaintiffs' proceedings be dismissed or the statement of claim struck out. This was followed by the filing, in the period from February to April 2021, of similar motions from all other defendants except Ms Thomson (Mr Shnider's trustee in bankruptcy). Various of those notices of motion have since been amended to include relief based on a want of prosecution (and, even if not formally amended, in oral submissions it was made clear that if the proceeding were to be dismissed for want of prosecution, rather than on the primary bases that have been put, then all the defendants would wish to obtain similar relief).
Pausing here, as noted above, there has been no application filed by Ms Thomson. However, if the applications by the other defendants for summary dismissal or permanent stay succeed, then it is clear in my opinion that such relief should include the summary dismissal or permanent staty of the proceeding as against Ms Thomson since the same matters leading to that relief in favour of the other defendants would apply to the proceeding as against Ms Thomson. Accordingly, in those circumstances, I would make such an order of my own motion.
The plaintiffs say that they took the view at the time (i.e., as I understand it, they mean at the time when the defendants' applications for summary dismissal or stay were filed) that an amendment would not be entertained in circumstances that the plaintiffs could not put forward a statement of claim which would be taken to trial and did not reflect the claim intended to be made.
The plaintiffs then served their 1 April 2021 notice of motion seeking, relevantly, a stay of the proceedings, and a grant of leave to amend the statement of claim. The notice of motion did not propound any form of amended pleading; nor was any draft amended pleading put forward in the affidavit in support of the notice of motion.
By an affidavit sworn 9 April 2021, emailed to all of the defendants, Mr Muriniti deposed as follows to the procedural issue which the plaintiffs say then confronted them (at [19]): a. The matter to be pleaded required the District Court Proceedings to be completed. This is because an integral part of the claim was whether there were in fact any significant costs arising as a result of the matters emitted by the Court of Appeal. Insofar as there were not significant costs upon examination, the inference will be that the costs application was kept alive artificially for an improper purpose. b. To plead what [should be] the consequences of the claims presently being determined by Judge Taylor in the District Court would be a waste of time and Court resources or an abuse of process or both. The Plaintiffs consider that it is likely an abuse of process because they would be required to plead for outcomes in the Supreme Court when the question of what those outcomes property are matters presently subject to determination by Judge Taylor in the District Court proceedings. c. If the Plaintiffs were to propose the necessary amendments now, then leaving to one side the abuse of process, they would be asking the court to consider a proposed amended pleading on the basis of the acknowledged and inevitable fact that the proposed pleading would not be the pleading intended to be taken to trial and would not be the pleading on the foundation of which interlocutory steps might practicably proceed. d. Even if such an amendment might be contemplated by the Court, the result would be a necessary but avoidable second tranche of amendments in due course. Given the complexity of the matter, and the number of parties that would involve substantial unnecessary costs and wasted court time.
Mr Muriniti's affidavit referred to the fact that when the matter had been relisted in the District Court, the plaintiffs had sought a direction to expedite the costs reference (see at [32]-[34]). The plaintiffs submit that, in the ordinary course, this should have made it possible to have the costs reference completed by September 2021 and final orders made very shortly thereafter. (On any view of things, such a timeframe seems to have been unduly optimistic bearing in mind that even apart from any "recalcitrance" on the part of the De Costi Parties - of which they stand accused by the plaintiffs - the plaintiffs themselves, in their insistence on ensuring that "exacting" standards were followed, seem also to have been contributing to the delay.)
The respective motions were listed in the applications list on 13 April 2021 on which occasion Mr Newell pressed for the plaintiffs' stay application (with an estimate of a day) to be heard first before the defendants' summary dismissal applications and a summary of the grounds on which the latter were made. I listed the respective motions together for hearing in November last year for the three and a half days I was told it would take for both to be heard together and set a timetable for the filing of evidence. The matter was relisted on 16 April 2021 in circumstances where there was a concern raised by one of the defendants that the judge before whom the motions had been listed had previously acted for one of the parties on a similar personal costs application and I relisted the matter before me to commence on 7 December 2021 instead. The matter came back for directions on 10 August 2021 when complaint was made as to delay in the filing of the plaintiffs' evidence and further timetabling orders were made.
On 31 August 2021, an affidavit of Mr Muriniti was filed in which he deposed as follows in relation to the further contemplated proceedings in the following terms as follows (at [22]-[23]): The Plaintiffs do not simply have in mind the prosecution of the proceedings presently before this Honourable Court, but also the bringing of proceedings against the parties who conspired and colluded against them in the various proceedings in which the Plaintiffs brought on behalf of Mrs Young against the Kings. The Plaintiffs intend to commence proceedings in relation to the manner in which they were represented by lawyers appointed by Lawcover and Suncorp to represent them in relation to the King v Young matters. The plaintiffs will seek to conduct the proceedings which will be brought against a number of parties by the Plaintiffs, some of which are already parties in the proceedings before this Honourable Court, as well as parties who are presently who are not Defendants in these proceedings, concurrently with these proceedings. The Plaintiffs will argue that both the present proceeding and proceedings which will be brought in relation to the Young v King cases constitute an overarching conspiracy, the objectives of which has been to pervert the course of justice and to smear, intimidate and if necessary destroy the Plaintiffs both personally and professionally in order to achieve their objectives of preventing the exposure of the fraud committed on Mrs Young. [My emphasis]
On 18 November 2021, the matter came back before me, on the exercise by the defendants of liberty to apply, again following non-compliance by the plaintiffs with orders (this time for the service of submissions). The previous day a proposed statement of claim had been served but Mr Newell made clear that this was "not our statement of claim", saying that his was because there was no way that the plaintiffs believed they could re-plead. Mr Newell also made clear (on 18 November 2021 - T 3.22-34, 4.17-18) that: … We didn't file the submissions because the submissions that we expected to file is to defend a statement of claim that we conceded a long time ago, has to be amended, and is liable to be struck out. So our submission is really what we filed yesterday ‑ it was served yesterday ‑ to show the nature of client's case. We have a motion before the Court for a stay, in order for the proceedings. That is a motion that is listed for hearing on 7 December. Any submissions that we file would be very limited to using the proposed amended statement of claim to explain the nature of the case, because it's not a question of evidence, we can't put on a volume of evidence; and secondly, to explain the basis for a stay. We're not going to respond to voluminous submissions to deal with something we've already conceded. … So what we'll be doing is annexing our proposed amended statement of claim to the submissions, to explain the basis for the stay. … [The plaintiffs] have no intention of attempting to take it to trial; and we agree that it needs to be struck out
As Mr Newell had made abundantly clear that the plaintiffs did not intend to proceed on their statement of claim in the form that had been filed, I struck out the statement of claim filed on 22 April 2020 and, on the basis that costs would follow the event, ordered the plaintiffs to pay the moving defendants' costs of the motions to strike out the statement of claim. (Mr Newell submitted that costs should be reserved as the plaintiffs had conceded the issue as to the statement of claim before the application was brought but that the plaintiffs could not do the amendment that could have precluded the need for this application because the proceedings on which this was based had not been finalised. However, there was no suggestion that the plaintiffs had consented to a striking out of what they conceded was an indefensible claim. Hence I made the costs orders but also made clear that there could be an application to vary them when the matter was before me for hearing in December 2021 - and I note no such application was then made.)
Thus, there is at present no extant pleading on foot in this proceeding.
A version of the proposed amended statement of claim was served on 22 November 2021 (replaced with an amended version of that document on 3 December 2021). Mr Muriniti informed the defendants in the email of 22 November 2021 with which the then version of the proposed amended statement of claim was served that the plaintiffs' position remained "that it is not an appropriate time to contemplate amendment because we do not know what our claim will be until after the [costs] Reference is completed and ruled upon" (see Mr Muriniti's email dated 22 November 2021). On the present applications, as had been indicated in the earlier directions hearings, the plaintiffs submit that the purpose of the proposed amended statement of claim is mainly to support their stay application (see their submissions at [28]).
Mr Muriniti's further affidavit of 30 November 2021 makes clear that the assignment of the foreshadowed further cause of action from Mrs Young's trustee in bankruptcy has still not occurred and that the negotiations for its possible assignment cannot continue until Mr Muriniti's firm prepares Bills of Costs for some 20 matters in assessable form (which work has not been done) (see at [10]). Mr Muriniti has not given an estimate as to when that task will be completed. The Lawcover/YPOL defendants here point out that the contemplated proceedings have been within the plaintiffs' consideration since at least June 2016, by reference to what was said in Young v Hones (No 5) [2016] NSWSC 822 at [51]-[52]).

[5]

Proposed amended statement of claim

The Suncorp defendants helpfully prepared a marked up version of the proposed amended statement of claim, inserting the names of the parties (with corrections where there appears to have been reference to the wrong defendant) and marking-up the document to identify the additional material that has been inserted in the proposed amended statement of claim and the amendments to the original statement of claim (which the version served by the plaintiffs did not do, contrary to the requirements of r 19.5(2)(b) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). With some corrections made in the course of oral submissions, and some clarification by Mr Newell as to what was intended in one paragraph, this document proved to be the easiest way to approach what is unfortunately a rather prolix and convoluted pleading. In that regard, much of the criticism made by the various defendants of the pleading is well founded.
While Mr Newell was at pains to point out that this is not the pleading on which the plaintiffs wish to prosecute their claims in this proceeding, I am referring to it as the proposed amended statement of claim as a convenient label (not because there is any intention on the part of the plaintiffs to pursue). Further, even though this is not a strike out application, and the plaintiffs did not seriously advance their alternative application for leave to file an amended statement of claim (because it is said that it is not possible for them yet to plead it), it is necessary to consider at least broadly the claims articulated in the proposed amended statement of claim (and the drafting and particularisation of those claims) as this is of relevance both to the exercise of discretion in relation to the temporary stay, or conversely summary dismissal, of the proceedings.
The relief claimed in the proposed amended statement of claim is damages (prayer 1), aggravated damages (prayer 2); exemplary damages (prayer 3); a declaration that the omission to renew Mr Newell's insurance with Suncorp was in bad faith in breach of s 13 of the Insurance Contracts Act 1984 (Cth) (Insurance Contracts Act) (prayer 4); and that certain judgments be set aside (Newell v De Costi (20 March 2018) - see prayer 5; and De Costi (No 6) (16 December 2016) - see prayer 6).
As noted above, Mr Newell says that half of the plaintiffs' case in the present proceeding depends on the outcome of the costs reference (T 19.39-40), in that the plaintiffs contend that the collusion of the insurers and legal representatives led to conduct findings that ought not have been made (those findings, including the Court of Appeal judgment, being challenged as based upon fraud; but absent the setting aside of those judgments the only issue as I see it is now the quantum of any such wasted costs). Mr Newell says that the "flip side" (of the argument that the conduct findings ought not have been made) is that the conduct complained of did not result in any significant wasted costs or that any such costs were de minimis (see at T 19.44-48). Mr Newell is adamant that the present proceeding does not seek to re-litigate any matters that have been finally determined.
The essence of the conspiracy claim asserted by the plaintiffs appears to be that which is alleged at [32]-[35] of the proposed amended statement of claim: 32) In or about no later than mid 2011: (a) The Lawcover Parties, Suncorp, the de Costi Parties, and the de Costi Lawyers and the Searle Parties wrongfully and with intent to injure Muriniti and Newell by unlawful means and with the purpose of achieving an unlawful object conspired and combined together to defraud Muriniti and Newell; and, (b) To conceal such fraud from Muriniti and Newell. (c) Thomson, Yeldham, Vitalone, Lloyd, Blacker and O'Connor joined the conspiracy no later than May 2013. (d) Muriniti and Newell rely for the purpose of the alleged conspiracy and combination on the pattern of conduct pleaded in this statement of claim. 33) The unlawful purpose of the conspiracy pleaded at paragraph 33 was to secure a costs liability unwarranted by the known facts which provided a claimable basis: (a) For Suncorp to decline renewal of Newell's professional indemnity insurance by Suncorp; and to, (b) For Lawcover to create adverse underwriting consequences for Muriniti; by combining to deny the District Court knowledge of the true circumstances of costs applications against Muriniti and Newell thus resulting in injury to Muriniti and Newell's ability to function as officers of the Court and with the ultimate purpose of preventing or inhibiting intimidating Muriniti and Newell to impede Muriniti and Newell from conducting Court proceedings on behalf of Mrs. Young in: i. The Land and Environment Court of New South Wales, and; ii. The Supreme Court of New South Wales. [The reference to "proceedings in the Supreme Court" (see [33(b)(ii)) in context appears to be a reference to the plaintiffs' representation of Mrs Young in the Young v Hones litigation.] 34) In the premises of paragraph 32 the end and aim which informed unlawful objects of the conspiracy were was the perverting of the course of justice in connection with claims then being made, and which might be made by Mrs Young by preventing her access to the Courts in denying her a legal representative: i. To pervert the course of justice in denying the District Court knowledge of the true circumstances of the costs applications against (resulting on a costs liability in Muriniti and Newell). ii. To prevent the course of justice by denying Mrs. Young legal representation by Muriniti and Newell thus impeding the conduct of Court proceedings by her. Unlawful Means 35) Further, the means employed to advance the conspiracy involved unlawful means including: (a) A unlawful systematic collusion in breach of section 319 Crimes Act by which the conspirators Defendants with the overarching purpose of perverting the course of justice in securing a disqualification and a concomitant basis for costs liability application against Muriniti and Newell in the Wachtenheim Proceedings by denying the District Court and the Court of Appeal knowledge of the true circumstances of costs applications against Muriniti and Newell.. (b) Deliberate Breaches of the statutory and contractual duties of good faith owed by Lawcover to Muriniti. (c) Effecting or causing to be effected deliberate breaches of statutory and contractual duties of utmost good faith owed by Suncorp to Newell. (d) Effecting or causing to be effected deliberate breaches of fiduciary duty and professional obligations by Yeldham, Vitalone and Lloyd owed to Muriniti. by the Gadens Parties and the New Suncorp Lawyers owed to Newellr (e) Each of the breaches pleaded herein and the acts and omissions pleaded herein are unlawful means in that they are acts or omissions performed with the intention to pervert the course of justice in breach of Section 319 Crimes Act.
Thus, the seriousness of the allegations made against the defendants is immediately apparent.
The defendants have identified multiple additional conspiracies asserted in the proposed amended statement of claim (which I summarise below) and some of which do not appear to relate directly to the primary conspiracy (the Suncorp defendants describing parts of the proposed amended statement of claim as non-sequiturs; but I come to that in due course).
Turning then to the multiplicity of conspiracies identified by the defendants in the proposed amended statement of claim, the first (the perceived primary or overarching conspiracy) is that at 32 (see above), namely, a conspiracy "in or about no later than mid 2011" between Lawcover, Ms Baxter, Suncorp, De Costi Seafoods (Holdings), De Costi Seafoods (Franchises), Mr Costi, Mrs Costi, Mr Stanton, Mr Shnider, Mr Theodore, Mr Thorpe, Ms Ng, Mr Holmes, Ms Searle and Mr Doyle Gray (32) "by unlawful means and with the purpose of achieving an unlawful object" to defraud the plaintiffs. (The unlawful means are pleaded at [35]; the unlawful purpose at [33]; the unlawful objects (plural cf the singular at [32[(a)) at [34].) It is further alleged (at 32) that the conspiracy and combination was "to conceal such fraud" from the plaintiffs.
Second, an expansion of the conspiracy when it is said that six new persons are alleged to have joined it "no later than May 2013" (Ms Thomson, Mr Yeldham, Ms Vitalone, Mr Lloyd SC, Ms Blacker, and Mr O'Connor (32). It is noted that Ms Thomson is thus alleged to have "joined" the conspiracy several years after her legal representatives.
Third, at some unidentified time (but the defendants say is presumably not later than 2004), that there was putative knowledge of the likely impact of the excavation and renovation by the Kings on the sub-surface watercourse (and, consequently, upon Mrs Young's property), and an intention by the Kings, Warringah Council, Mr Hones (Mrs Young's former solicitor in the Young v King litigation) and Mr Hemmings (Mrs Young' former barrister in the Young v King litigation (none of whom is joined to the present proceeding but at least some of whom appear to be the putative defendants to the further contemplated proceedings - see T 53.6-16) for an expensive solution to be imposed on Mrs Young to cause her to sell her home at an undervalue, including a plan by Mr Hones and Mr Hemmings to "contrive a need" for an independent engineer to resolve an "apparent dispute" as to the structure of a required retaining wall ([41]-[42]).
Fourth, an alleged agreement between Mr Shnider (who it will be recalled had been joined by the Wachtenheim Parties as a cross-defendant to the Wachtenheim cross-claim) and Mr Wachtenheim (the plaintiffs' former client in the De Costi proceedings) (i.e., this alleges an agreement between opposing parties to the litigation) to have a meeting with the plaintiffs on 20 October 2011 with the alleged "collateral purpose" of creating "a pretext to record a false claim that an Offer of Settlement letter had been sent" (through Mr Shnider's lawyers) to Lawcover (see 58(iii)) or to Mr Muriniti (see 58(i)), which pretext would be used to cause or facilitate Mr Wachtenheim being able to make a claim against the plaintiffs (58-58). The "Suggested Claim" is said to be one premised on Mr Wachtenheim being placed in the position in which he would have been had he accepted the Offer of Settlement at the time it was made.
Paragraph [58] might indeed be said also to raise a further conspiracy (or at least it alleges improper conduct) insofar as it asserts (58(v)) that a letter was improperly sent foreshadowing a personal costs application against Mr Muriniti in relation to the Wachtenheim cross-claim "pursuant to a fixed intention by the de Costi Parties to make a costs application on an undisclosed basis and with the intention" of requiring the plaintiffs to notify their insurers forthwith.
Fifth, the alleged "February Motion Agreement" (see 71), being an alleged agreement between the De Costi Parties and Mr Shnider (to which Ms Searle is said to be a party - see [73]) that Mr Shnider would procure Mr Wachtenheim to give false evidence (that his own and other deponents' affidavits were fabricated by the plaintiffs) to be used as the foundation for a motion seeking inter alia summary dismissal of Mr Wachtenheim's cross-claim in the De Costi litigation ([65]) and to "facilitate costs liabilitiy" for those proceedings. It was said that but for the alleged agreement, the February Motion would never have been brought.
The February Motion is defined (in [65]) as a motion filed in Court by the De Costi Parties on 1 February 2012 seeking: an order for dismissal of the Wachtenheim cross-claim proceedings; an order for costs against Mr Wachtenheim; or in the alternative, costs against Muriniti and Newell (this seemingly separately defined as "the February Costs Application").
Sixth, an alleged agreement between the De Costi Parties, Mr Shnider, Lawcover and Suncorp whereby, in substance, the insurers would conceal the allegedly false evidence referred to above; protect the De Costi Parties and Mr Shnider; and "use their control" of "the February Costs Applications", as the plaintiffs' insurers, so as to engineer a costs liability of the plaintiffs (72).
Paragraph 72, which includes the very serious allegation as to the suborning of perjury, reads in full as follows: 72) Further, Muriniti and Newell say in relation to the February Motion Agreement as follows: a) In the premises of Paragraph 67 the advancement of the February Motion Agreement and/or the February Costs Applications involved Wachtenheim giving false evidence that Muriniti and Newell had fabricated his sworn evidence and involved those putting forward his evidence suborning perjury. b) Further, in the premises of the matters pleaded at Paragraph 67 the advancement of the February Motion Agreement: i. Prima facie had very poor prospects of supporting a costs liability in Muriniti and Newell; and, Particulars The establishment of the intended costs liability for the costs of the proceedings depended on the Court accepting that each of the Wachtenhein Vial and Kevin Ng affidavits were fabricated by Muriniti and Newell in circumstances that those deponents were not responsible for the falsehoods notwithstanding that each of them had read the affidavits in draft and sworn to the facts recorded in them. (c) In the premises of Sub-paragraphs (a) and (b) the February Motion Agreement prima facie carried obvious and serious risks to the parties to the February Motion Agreement and Wachtenheim in the absence of special knowledge by those parties that in advancing the February Motion.they would be held harmless by Muriniti and Newell or those in the event representing Muriniti and Newell from the risks in sub-paragraphs (a) and (b). (d) In the premises of sub-paragraphs (a) (b) and (c), and of the pattern of conduct pleaded in this statement of claim, the de Costi parties and Shnider had the benefit of an agreement with Lawcover (as the party expected to have control of any defence to the February Costs Application so far as it was against Muriniti) and Suncorp (as the party expected to have control of any defence of the February Costs Application so far as it was against Newell) that: (i) Lawcover and Suncorp would not expose the falsity of the affidavits supporting the February Motion and February Costs Applications incorporated therein; and, (ii) Lawcover and Suncorp would not expose expressly or by necessary implication the complicity of the de Costi Parties and Shnider in bringing the February Motion for costs based on false evidence; and, (iii) Lawcover and Suncorp would use their control of the February Costs Applications (as Muriniti and Newell's insurers) to effect an outcome resulting in a costs liability in Muriniti and Newell.
The Lawcover/YPOL defendants say that the allegation at 72 appears to be as at a time when a motion was on foot for the summary dismissal of Mr Wachtenheim's cross-claim with a consequent order for costs against Mr Wachtenheim (and, alternatively, against the plaintiffs) if the summary dismissal motion succeeded. Thus, it is noted that the allegation appears to be that Lawcover and Suncorp were conspiring with the De Costi Parties and Mr Shnider to engineer a costs order against the plaintiffs (to the ultimate expense of Lawcover and Suncorp, as insurers) before the summary dismissal motion had been heard and before any costs claim had actually been made against the plaintiffs.
The Lawcover/YPOL defendants point out that it is alleged at [75] that the effect of the serving of final submissions by the De Costis on 28 September 2012 in respect of the 2012 hearing was (among other things) to require the plaintiffs to notify Lawcover and Suncorp "with" the Final Submissions, allowing the insurers to "take control of the direction of the response to the intended claims immediately" of "the submissions" but that (as alleged at [80]) the De Costi Parties only filed a notice of motion seeking costs against the plaintiffs pursuant to s 345 of the Legal Profession Act and s 99 of the Civil Procedure Act (almost a year later) in the first week of August 2013.
Further, I note that the allegation at [75] includes (at (c)(IV)) that the collateral purpose of the final submissions was to cause Mr Wachtenheim to attack the plaintiffs by announcing his intention to assert that the plaintiffs had facricated his evidence such that a costs application could be settled by Lawcover and Suncorp without the allegations being scrutinised by a Court.
Pausing here, there is also an allegation the that service of the Final Submissions in respect of the 2012 hearing was improper (see 75) in that: there was as yet no judgment and there was to the necessary knowledge of the de Costi Parties no prospect of Taylor DCJ entertaining the submissions for the purposes of his expected judgment in the premises of which the submissions had a collateral purpose.
Seventh, an alleged "understanding" between the De Costi Parties, Lawcover and Suncorp that the consequence of the De Costi Parties' application for personal costs orders against the plaintiffs would be that the professional indemnity insurance of at least one of the plaintiffs would not be renewed, irrespective of the merits of the claim (76(IV)).
Eighth, (in the premises of the matters pleaded at [78]) an alleged agreement between the De Costi Parties, Mr Thorpe, Mr Stanton, Mr Holmes, Ms Ng and Mr Shnider to create false evidence "the purport of which" was that Mr Muriniti had fabricated a false statutory declaration, with a view to supporting the False Affidavits Allegation intended to be advanced for the purposes of the De Costi Parties' Costs Application and but for which agreement it is alleged that the De Costs Parties' costs application would not have been brought ([79]).
Ninth, in the premises of [81] and [82] (which include an allegation that Lawcover and Suncorp concealed the terms of Mr Stanton's costs agreement because they did not want the plaintiffs to be on enquiry as to the "purport" of the agreement) and in the premises of "the pattern of conduct pleaded in this statement of claim", an alleged agreement by the De Costi Parties, Lawcover and Suncorp that they would "facilitate the establishment of a costs liability" in the plaintiffs in favour of the De Costi Parties ([83]). (The Lawcover/YPOL defendants say that it is not clear whether this agreement is different to the agreement alleged at [79] of the proposed amened statement of claim; though the relevant paragraphs appear to be premised on - i.e., said to be "in the premises" of - different allegations at [78] as opposed to [81] and [82].)
Tenth, that, in the premises of [91] and [92], the "Trustee Costs Claim" (defined in [91] as being an application for, inter alia, Ms Thomson's costs of the cross-claim; and it being alleged at [92] that it was "misguided" and exhibited numerous "infirmities") had no reasonable prospects of success and was brought "on the foundation of an agreement or understanding" that Lawcover and Suncorp would "use their endeavours to afford a settlement" for Ms Thomson "and/or hold [Ms Thomson, Ms Searle and Mr Doyle Gray] harmless from effecting an abuse of process" ([93]). (Complaint is made that it is not said by or between whom, or when, or how the alleged agreement or understanding was made or reached.)
Reference is also made in this context to [152] where it is alleged that the Trustee Parties brought and continued the Trustee Costs Application on the basis of an agreement with the insurers (the "Hold Harmless Agreement") that, in consideration for bringing the claim against the plaintiffs they would "secure a recovery and/or be held harmless" and that this Hold Harmless Agreement involved the insurers facilitating a costs liability against the plaintiffs (i.e., their own insured) with "the expected effect and clear purpose" of adversely affecting the "security" of the plaintiffs' professional indemnity insurance with "the end and aim" being "adversely [to] impact the conduct of a current Court case or Court cases in which [the plaintiffs] were involved and which were of particular concern" to Lawcover and Suncorp and "by implication involved an intention to pervert the course of justice".
Eleventh, an allegation that, from and after March 2015 various parties ((a) the De Costi Lawyers (Mr Thorpe, Ms Ng, Mr Stanton and Mr Holmes) "on the instructions and with the authority of" De Costi Seafoods (Holdings), De Costi Seafoods (Franchises), Mr Costi, Mrs Costi, Mr Theodore; (b) Lawcover and Ms Baxter; (c) Mr Yeldham, Ms Vitalone and Mr Lloyd SC; (d) Ms Blacker and Mr O'Connor; and (e) Mr Watson) "maintained the conspiracy by colluding to achieve a basis for a costs liability by perpetuating and inflating or overstating the Residual Claims [defined at 103] without regard to their merits which conduct in the premises amounted to a perverting of the course of justice" ([108]).
Twelfth, an allegation that, in about July 2015, Mr Yeldham, Ms Vitalone, Mr Lloyd SC, Mr Thorpe, Ms Ng, Mr Stanton and Mr Holmes conspired to "plant" on Mr Muriniti's file an affidavit sworn by Mr Stephen Vial (a franchisee of De Costi Seafoods (Holdings) and De Costi Seafoods (Franchises)) on 10 January 2012 with the "intention" of constructing "false evidence that the affidavit was on the Muriniti file in anticipation of an assertion by [Mr Muriniti] that he had never had it and that it was planted" ([133]-[135]) (T 61.8-10).
The means by which it is alleged that the affidavit was "planted" on Mr Muriniti's file appear to be that the "Lawcover Solicitors" (i.e., the YPOL defendants) wrote to Mr Muriniti on 24 July 2015 transmitting a copy of an affidavit sworn by Ms Vitalone (see at [131] this affidavit is said to have been sworn at the direction of Mr Yeldham) ([133]) and on 3 August 2015 the Lawcover Solicitors wrote to Mr Muriniti and requested the entire file to be delivered to them. It is alleged that Ms Vitalone's affidavit deposed to the documents exhibited to her affidavit as having been sourced either from the Court file or from Mr Muriniti's file, and deposed that a bundle of correspondence between Mr Vial and Mr Muriniti had been annexed to Mr Vial's affidavit (see at [131]) and therefore "implied" that Mr Muriniti had been in possession of Mr Vial's affidavit.
The Lawcover/YPOL defendants complain that it is unclear how this is alleged to support the allegation that Mr Yeldham, Ms Vitalone, Mr Lloyd SC, Mr Thorpe, Ms Ng, Mr Stanton and Mr Holmes conspired to "plant" Mr Vial's affidavit on Mr Muriniti's file. Given the convoluted nature of this allegation it is worth setting out in full the allegations in relation to the Vial Affidavit: 131) On 21 July 2015 Vitalone [erroneously referred to as the seventh defendant] acting at the direction of Yeldham [erroneously referred to as the sixth defendant] swore an affidavit ("the Vitalone Affidavit") the contents of which included or contended for the following: (a) Vitalone [erroneously referred to as the seventh defendant] deposed that the documents exhibited to her affidavit were sourced from either the Court file or Muriniti's file. (b) Vitalone [erroneously referred to as the seventh defendant] deposed that a bundle of correspondence between the Stephen Vial and Muriniti exhibited to the Vitalone Affidavit had been annexures to the affidavit of Stephen Vial sworn 10 January 2012; and, (c) It was a matter of record that no affidavit sworn by Stephen Vial on 10 January 2012 ("the Vial 10 January Affidavit") had ever been on the Court file in the premises of which the Vitalone Affidavit alleged that the Lawcover Solicitors had obtained the Vial 10 January Affidavit from Muriniti's file and by implication Lawcover had been in possesion of the Vial 10 January Affidavit. 132) The allegation that Muriniti had the Vial Affidavit on his file: (a) Was knowingly false contrary to the matter pleaded in paragraph 91 (c) in that: (i) The Vial Affidavit had never been served on him by the de Costi Lawyers and had never heard of it and the: and was intended to injure Muriniti; in that: (ii) Muriniti had never had the Vial Affidavit on his file or in his possession by any means; and, (iii) Was contrary to the true position which was that the Vial Affidavit was obtained by the Lawcover Lawyers from the de Costi Lawyers as the only persoms who could have had it and the fact that it was so obtained was concealed by the Lawcover Solicitors from Muriniti. (b) The Vial 10 January Affidavit was prepared after the statement was taken from Vial in November 2011 and in the premises: (i) The purport of the Vial 10 January Affidavit was to establish the the 22 June Affidavit represented false evidence obtained by Muriniti and intended by Muriniti to be put before the Court; and, in the premises of sub-paragraph (i); (ii) The false evidence that Muriniti had the Vial 10 January Affidavit in his possession from January 2012 supported the following inferences: 1. Muriniti would have been on notice that Vial had sworn that his previous affidavit was false; and, 2. Muriniti was aware in calling Vial with the intention to read the 22 June Affidavit that he was proposing to put before the Court a false affidavit; and, 3. Thus overcoming the evidence pleaded at 74(a) which contra- indicated the possibility that Muriniti knew that the Vial 22 June Affidavit was false.and thereby providing evidence that Muriniti knew that Vial's 22 June Affidavit was false as prefigured by the matters pleaded at Paragraph 127(f). 133) On 24 July 2015 the Lawcover Solicitors wrote to Muriniti transmitting the Vitalone Affidavit and on 3 August 2015 the Lawcover Solicitors wrote to Muriniti requesting his entire file be delivered to them. 134) The Vial 10 January Affidavit was of no utility in compromising Muriniti unless evidence could be created that the Vial 10 January Affidavit had been served on Muriniti by the de Costi Parties and in his possession since January 2012 in the premises of which the de Costi Lawyers (on the instructions of the de Costi Parties) provided the vial 10 January Affidavit to the Lawcover Lawyers in the knowledge that the Vial 10 January Affidavit would be planted on the Muriniti File. 135) In the premises the Lawcover Lawyers and the de Costi Solicitors intended: (a) To provide an opportunity for the Lawcover Lawyers or a third party to plant the Vial 10 January Affidavit' on the Muriniti File supporting the inferences pleaded at paragraph 132(b)(f); and to that end, (b) Constructed the false evidence that the affidavit was on the Muriniti File in anticipation of an assertion by Muriniti that he had never had it and that it was planted.
Pausing here, I note that there is also an allegation (at 74(ix)(c)) that the De Costi Lawyers had agreed with Mr Vial that he would "participate in an 'ambush' of Mr Muriniti by remaining silent about alleged concerns [about] his June [a]ffidavit until … cross-examined by [Mr Stanton] at which time he would provide answers memorised from the Vial statement".
Thirteenth (related to the above), an allegation that (at some unidentified time) Ms Baxter agreed with the YPOL defendants, Mr Thorpe, Ms Ng, Mr Stanton and Mr Holmes "to conceal the circumstances" in which an affidavit sworn by Ms Vitalone had "implied that [Mr Muriniti] had in his possession" the affidavit sworn by Stephen Vial on 10 January 2012 ([136]). The plaintiffs allege that Mr Muriniti sought a copy of the affidavit sworn by Stephen Vial on 10 January 2012 from Ms Ng, YPOL, and Ms Baxter, all of whom refused the request.
Fourteenth, an allegation that, in February 2016, Mr Andrew "joined the conspiracy" (complaint is made that precisely which conspiracy is not here identified) when his firm (on the instructions or by agreement with Suncorp) took over the conduct of the De Costi Costs Claim and the Trustee Shnider Costs Claim from Gadens and Ms Blacker and Mr O'Connor joined his firm and agreed with Suncorp to advance the conspiracy with the principal goal of protecting Suncorp by concealing the lack of merits in the De Costi Costs Claim, not challenging the allegations mounted by the De Costi Costs Claim, and thereby facilitating the obtaining of costs orders against the plaintiffs, occasioning reputational injury to the plaintiffs, and precluding Mr Newell from obtaining insurance and thus practising as a barrister ([144]).
Fifteenth, an allegation that (at some unidentified time) the De Costi companies, Mr Costi, Mrs Costi, Mr Theodore, "the Suncorp Parties" (again, this term is not defined in the proposed amended statement of claim), Lawcover and Ms Baxter "agreed" (again, complaint is made that it is not said how) to "suppress recognition of the purport" of the "False Affidavits Allegation" so that the plaintiffs would not be on enquiry as to how the allegation had been intended to operate against them (147 and (c)).
Sixteenth, an allegation that the De Costi companies, Mr Costi, Mrs Costi, Mr Theodore, Mr Thorpe, Ms Ng, Mr Holmes, Mr Stanton, Mr Yeldham, Ms Vitalone, Mr Lloyd SC, Ms Blacker, Mr O'Connor, Mr Andrew and Mr Watson SC entered into a "collusive agreement" "so inadequately [to] defend the de Costi Parties' allegations as to facilitate the establishment of a costs liability" in the plaintiffs ([149]).
Seventeenth (and related to the above), it is alleged that the De Costi companies, Mr Costi, Mrs Costi, Mr Theodore, Mr Thorpe, Ms Ng, Mr Holmes, and Mr Stanton brought and continued with the application for personal costs orders against the plaintiffs "on the basis of an agreement with" Lawcover and Suncorp (again complaint is made that it is not said how or when such an agreement was struck) that, in consideration for bringing the claim, the De Costi companies, Mr Costi, Mrs Costi and Mr Theodore "would secure a monetary recovery and/or be held harmless", the "end and aim" of which was "adversely [to] impact the conduct of a current Court case or Court cases" in which the plaintiffs were involved and which were of particular concern to Lawcover and Suncorp "and by implication the agreement was informed by an intention to pervert the course of justice" ([150]).
Eighteenth, an alleged agreement between Lawcover, Ms Baxter and Suncorp (and Mr Yeldham, Ms Vitalone and Mr Andrew agreed to participate in the fraud) to defraud the plaintiffs "of their right to sue" Ms Thomson, Ms Searle and Mr Doyle Gray "and to receive compensation for the underwriting consequences of the costs applications" (151).
Nineteenth, an allegation that Mr Stanton and Mr Holmes (on instructions and with the authority of the De Costi companies, Mr Costi, Mrs Costi and Mr Theodore); Mr Lloyd SC (on instructions and with the authority of Lawcover; Ms Baxter, Mr Yeldham and Ms Vitalone); Mr Watson SC and Mr Andrew (on the instructions of Suncorp) "advance[d] the conspiracy" during the course of the Court of Appeal hearing in relation to the De Costi personal costs orders by making certain allegedly false representations or otherwise "omitting to correct the false representations" ([154]). The alleged representations are pleaded at [154] as follows: 21. Watson represented to the Court that Newell personally did the allegedly illegal taping knowing the said representation was false and did not acknowledge the true position until the Court pressed him as to the matter. The intention of Watson was to have the Court of Appeal understand that Newell had effected the allegedly illegal recording. ii. Stanton represented to the Court that Kevin Ng was the witness for Wachtenheim knowing that representation to be false and material to whether any costs order should be made in relation to Kevin Ng's affidavit. iii. Stanton represented to the Court that the de Costi Parties Fourth, Fifth, Sixth, Seventh and Twenty-Third had filed all of their affidavits by December 2011 knowing the representation to be false and knowing that the matter was material to the Court's decision whether to order costs by reference to the number of affidavits served by Wachtenheim Affidavits finding. iv. Stanton represented to the Court of Appeal that the de Costi Parties had issued 6 Notices to Produce for the alleged 2003-2004 Wachtenheim Diary knowing the representation to be false and material to the Court's decision whether to order costs by reference to the issue of the missing diary. v. The Lawcover Lawyers and the Suncorp Lawyers, Stanton and Watson all omitted to correct the false representations pleaded in sub-paragraphs (ii),(iii) and (iv).
As part of the above conspiracies (or perhaps as a separate one), there are allegations made at [74] as to the so-called Vial episode in the course of the 2012 hearing, including of collusion with a witness and suborning false evidence: Stephen Vial Episode a) The de Costi Parties and de Costi Lawyers colluded with a witness Stephen Vial and procured him to make allegations that Muriniti had prepared a false misleading affidavit which being the Vial June Affidavit. in order to compel the First Vial was subpoenaed to give evidence by Wachtenheim at the 2012 trial. The circumstances of the allegation which emerged at the trial made were as follows: (i) … (ix) In the premises of sub-paragraphs (i) to (ix) [sic] Vial was discredited and shown to be colluding with the de Costi Parties to construct an allegation that Muriniti had fabricated his affidavit in that: a) Vial had intended in attending Court to systematically back track from his June Affidavit notwithstanding his sworn evidence in chief that he had nothing to change. b) Vial had been paid substantial sums to cooperate with the de Costi Parties. c) The de Costi Lawyers had agreed with Vial that he would participate in an ambush of Muriniti by remaining silent about alleged concerns concerning his June Affidavit until he was cross- examined by the Stanton at which time he would provide answers authorised from the Vial statement. b) The de Costi Lawyers had procured Shnider to give evidence favourable to the de Costi Parties and having the purpose of compromising Muriniti and Newell by constructing a suggestion that they had a propensity to fabricate evidence by the following means: i. Shnider suggested that emails in fact written by himself and sent to Newell; and, (i) Recording that he had been misled by Theodore and George Costi as to the gross profit margin to be expected in the operation the Dee Why Business; and, (ii) What representations had been made to him by de Costi parties and were either not his emails (but those of Newell) or by reason of the misconduct of Muriniti and Newell did not to the knowledge of Muriniti and Newell reflect his true position conveyed in conference on 11 October 2007 with Muriniti and Newell. (iii) By telling Newell on the telephone on 16 July 2011 that George Costi had confirmed that the Dee Why Business performed at a gross profit margin of 40% ("the 40% Statement") which was consistent with an email at CB7540 and then planning when cross-examined by Newell to deny that he had ever said such a thing and had always claimed otherwise. Shnider in his oral evidence in fact denied making the 40% statement that he had in fact made shortly after Muriniti swore an affidavit on 30 July 2012 setting out the statement by Shnider. (iv) By giving evidence that Wachtenheim was present at the 11 October Conference with Muriniti and Newell in breach of professional rules when he Wachtenheim was not and that he understood that he was attending as a witness to assist Wachtenheim in circumstances that Wachtenheim had in fact foreshadowed suing him and Shnider had asked at the outset of the conference that he not be sued citing the possibility that it would kill "Mimi" ("Wachtenheim's mother"). (v) The conduct of Shnider was procured by the Shnider Payments.
By reference to the above, the Lawcover/YPOL defendants say (and I agree) that the proposed amended statement of claim contains confusing, seemingly disparate, allegations of multiple conspiracy agreements, or multiple iterations of the one conspiracy agreement (but not necessarily involving the same parties). Further, they complain that there are various other factual allegations which are plainly not material facts for the purposes of the cause of action sought to be advanced (referring by way of example to [52]-[54] of the proposed amended statement of claim).
It is said that, despite the multiplicity of allegations, it is apparent (from, inter alia, 32 of the proposed amended statement of claim) that each of the variants of alleged conspiratorial conduct is based on the same overarching conspiracy and its purpose (as alleged in [32]-[35]) being: in the case of Mr Newell, causing him to be without professional indemnity insurance which would require him to cease practising as a barrister; in the case of Mr Muriniti, causing his insurance premium to increase; causing "injury to the Plaintiffs' ability to function as officers of the Court"; and with the "ultimate purpose", being to prevent or intimidate the plaintiffs from conducting Court proceedings on behalf of Mrs Young in the Land and Environment Court or this Court. However, complaint is made that there is a lack of consistency between the alleged conspirators, their alleged agreements and objects at different times. In particular, complaint is made that, despite alleging the involvement of a large number of conspirators (there are 23 defendants but other persons are named in the pleadings as having an involvement in part or all of the events relied upon as part of the overall conspiracy), the pleading makes no attempt to address how all of those persons and entities planned and agreed to engage in the various alleged components, whether they knew what others were doing at various times in purported advancement of the conspiracy or the source of any such knowledge.
Similarly, the Suncorp defendants complain that the plaintiffs do not address how each of the various "agreements" or "understandings" (between the various different combinations of the twenty-three defendants, at different (and often unstated) points in time, each with different purposes) are connected. It is noted that Suncorp and Mr Watson SC are not alleged to be involved in each of the various agreements or understandings. It is said that the plaintiffs do not address how (or why) either Suncorp or Mr Watson SC would have knowledge or awareness of any of the other defendants' alleged conduct. Indeed, it is said that much of the pleaded conduct of the other defendants is conduct of which Suncorp and Mr Watson SC could not have actual knowledge or awareness, and for which there would be no reasonable basis to conclude they ought to have had knowledge or awareness, not least because the conduct pre-dated Suncorp being on notice of the Young v King and De Costi proceedings.
So for example, the Suncorp defendants say that there is no conceivable basis for Mr Watson SC to have any knowledge of the conduct (some eleven years prior to his acting for Mr Newell in the De Costi Costs Application) of the Young v King proceedings (or indeed, of the existence of Mrs Young).
I address in due course the particular complaints made as to the proposed amended statement of claim and the manner in which the claims against the various defendants have been articulated.

[6]

Plaintiffs' submissions

As adverted to above, the plaintiffs emphasise the predicament in which they say they found themselves at the time of the filing of the initial statement of claim; that being, in essence (and I am here paraphrasing the oral submissions), on the one hand, their concern that limitation issues might be raised against them if proceedings were not instituted in April 2020 and, on the other hand, their perceived inability to plead (or plead fully) their claims (not knowing the "outcome" of the costs reference and what evidence might be discovered in the course of the costs reference) and their concern that a proceeding raising issues in relation to the (incomplete) costs reference and how it might (or should) be dealt with by the District Court would be an abuse of process.
The plaintiffs point to the fact that when the pleading was served (some five or so months after the statement of claim was filed - and hence just before it was due to become stale), they indicated that they would file a motion for a stay when all of the parties had filed appearances (and they point out that not all of the parties had filed appearances in the proceeding before 1 April 2021 - referring in this regard to Mr Stanton and the De Costi Parties who did not file an appearance until they filed and served motions to dismiss and or strike out on 1 April 2021). The plaintiffs note that they then filed their motion seeking a stay, or in the alternative to amend, on 1 April 2021.
The plaintiffs say that they could not have contemplated a motion to amend (if, which they clearly do not believe, that had been the alternative that they believed was appropriate) until 1 April 2021 when all of the parties had appeared in the proceedings; and they say that their intention in framing the motion was to seek a stay (and for directions for a motion to amend if such a stay was not granted). (This appears to be inconsistent with the information given in the online court and early directions to the effect that an amended statement of claim was then in the course of being prepared but be that as it may.)
It is said that, during the period from and after 11 September 2020 (when most of the defendants were served with the original statement of claim with the covering letter referred to above), the plaintiffs did not receive any communication from the defendants as to how the "procedural issue" that had been identified should be dealt with (and it is submitted that it was not in the plaintiffs' interests for a discussion as to how the circumstances should be dealt with); and that no defendant has ever suggested that it was viable to attempt to progress the proceedings while the costs proceedings the subject of the plaintiffs claim were still to be resolved.
The plaintiffs say that they were in a difficult position because, although they reasonably understood that a stay was the only reasonable course, they were leaving themselves vulnerable; and that, in the circumstances they decided that a document in the form of a proposed amended statement of claim was necessary "to show that there were abundant facts speaking of the civil conspiracy the subject of their claim". As already noted, in their submissions on the present application the plaintiffs say that the purpose of the proposed amended statement of claim is mainly to support the plaintiffs' application for a stay (as the costs reference continues to be prolonged and the facts to inform the balance of the intended pleading are not yet known).
The plaintiffs contend that the conduct of the costs reference (quite apart from its ultimate result) raises important matters going to the heart of the conspiracy. It is submitted that these matters cannot be pleaded in this Court without an improper presumption as to how Taylor SC DCJ should deal with them in the District Court. The plaintiffs here emphasise that the plaintiffs have no concern about the conduct of the proceedings by Taylor SC DCJ, which it is said has been deferred to the referee. They say that the conduct of the costs reference has for the most part been the responsibility of the referee, with Taylor SC DCJ yet to make findings about that conduct.
Mr Newell in oral submissions said that it had "always" been contemplated that proceedings would be commenced on the foundation of the completed costs proceedings (T 26.7-9) but, when pressed as to why the claim could not be pleaded by reference to the range of alternative outcomes of such proceedings, his response is twofold - that the plaintiffs have "strong suspicions" but do not know; and that the claim is not going to be based just on the outcome but also on the manner in which the costs reference has been conducted (see at T 27.10-12).
As to the merits of the claim, the plainitffs maintain that the proposed amended statement of claim makes clear that their claims are not illusory. They emphasise, as compelling, the following: that the cost application claims (by the Trustee and the De Costi Parties) were brought in 2013; that no money had been paid on either claim when, on 24 April 2014, Suncorp "used" the claims as a basis to decline renewal terms for Mr Newell; that Suncorp did not substantially increase the premium but "went directly to the drastic step" of declining to renew the insurance (knowing, it is said, that Mr Newell would not be able to renew his practising certificate without arranged insurance); and that Lawcover "used" the fact of two claims to justify a major increase in Mr Muriniti's premiums.
The plaintiffs say that, some eight years later, no moneys have been paid; that the Trustee abandoned her claim (and was compelled to pay costs); and that the costs reference set up to determine the quantum of wasted costs has not yet reached a conclusion. It is submitted that had the De Costi Parties' costs application been brought and continued for a proper purpose, the De Costi Parties should be anxious to recover their costs but that they are showing no interest in progressing the costs reference (or, by implication, receiving their claimed wasted costs) (which has led the plaintiffs, they say reasonably, to suspect that this is because the De Costi Parties do not believe that there are any significant costs associated with the particular declarations made by the Court of Appeal. Again, complaint is made that, to date no money has been paid on the De Costi Costs claim notwithstanding which Mr Newell has been prevented from practising as a barrister for seven years. (A recurrent theme in the submissions is the injury or prejudice to Mr Newell of being unable to practise as a barrister.)
The plaintiffs say that the cumulative circumstances giving rise to their claim took place over a period of six years and that this posed a significant challenge "in supporting inferences of agreement" when material events are spread over six years while at the same time maintaining a narrative in concise chronological form. They say that they have responded to this challenge in the proposed amended statement of claim (which I note includes as particulars of the damage suffered by both Mr Muriniti and Mr Newell, "loss of professional income by reason of professional time expended … to unravel the conspiracy pleaded …" - see at 156(i)).

[7]

Defendants' submissions

The respective defendants' submissions raise broadly the same or similar themes and to a large extent the submissions of the Lawcover/YPOL defendants and the Suncorp defendants were adopted by the other defendants. For convenience, I propose to synthesise the respective defendants' submissions rather than dealing with each sequentially as there is an inevitable degree of overlap.
Broadly, speaking, the complaints made by the defendants (apart from complaints as to the deficiency of the proposed amended statement of claim both in substantive respects and in its non-compliance with the requirements of the UCPR, which I address in due course) include: that the proposed amended statement of claim makes (but does not properly plead) very serious allegations (including of fraudulent conspiracy, conduct directed to perverting the course of justice, and criminal) all of which would attract the Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 standard of proof and should not be made without clear and cogent evidence; that the conspiracy allegations are of the same kind and put forward in the same manner for which the plaintiffs have been repeatedly authorised in the past; that the conspiracy allegations are inherently unlikely and implausible, being predicated on an alleged course of behaviour not consistent with the ordinary experiences of conduct by professionals (and which behaviour is readily explicable by other far more plausible innocent explanations); that many of the allegations in the proposed amended statement of claim said to support the alleged conspiracy (or conspiracies) are demonstrably and objectively incorrect; that the proceedings, insofar as they involve a challenge to the manner in which the personal costs applications were conducted and to the findings of the District Court and Court of Appeal in determining the personal costs applications against the plaintiffs, impermissibly involve the re-litigation of issues already dealt with by the courts (and amount to an impermissible collateral challenge to the findings by those courts); and that the plaintiffs even now do not contend that the proposed amended statement of claim is one that can be taken forward to trial. In addition, various of the defendants invoke the principles of advocate's immunity which they say would be a complete answer to claims (or at least some of the claims) made against them.
It is noted that the proposed amended statement of claim makes the most serious of allegations as against 23 different defendants (including two substantial insurers, two senior counsel, two junior counsel and ten solicitors) (although I interpose to point out that there are other persons whose conduct is the subject of criticism in the proposed amended statement of claim but not yet joined as defendants to the proceeding - most notably the legal practitioners who were joined as defendants in the now disposed of Young v Hones proceedings and whom the plaintiffs apparently contemplate the bringing of fresh proceedings involving much the same allegations as in those earlier proceedings). Further, insofar as there are now allegations of contravention of s 319 of Crimes Act 1900 (NSW) (Crimes Act) (namely, the doing of acts, or making of omissions, intended to pervert the course of justice - see 35 and(e); 156 of the proposed amended statement of claim; and Particulars Justifying Exemplary Damages, at vii on page 67 of the proposed amended statement of claim), it is noted that this carries a maximum sentence of 14 years' imprisonment and is a "serious indictable offence" (s 4 of the Crimes Act).
As adverted to above, emphasis is placed on the fact that the plaintiffs do not contend that the proposed statement of claim can be taken forward to trial, on the basis that it awaits the final determination of the costs reference in the District Court proceedings (and the evidence disclosed in that process); and that, at least in earlier correspondence from Mr Muriniti, the contingencies on which advancement of the proceedings appeared to depend included the plaintiffs obtaining an assignment of a cause of action from the trustee in bankruptcy of Mrs Young (some five years after Mrs Young was made bankrupt and which they have apparently been seeking to obtain since at least 11 September 2020) and the commencement of further proceedings involving additional allegations of conspiracy against at least some of the same parties to the present proceeding.
Complaint is made by the defendants that, to the extent that at least one of the contingencies required for the proceedings to advance is the quantification of wasted costs relating to what is described as the "Androulla claim" in the De Costi proceedings, that outcome might never support the plaintiffs' case (with the result, it is said, that it must fail). Further, it is argued that the fact that the plaintiffs are anticipating "evidence" from the costs reference to support their claims means that they have commenced the proceedings without such evidence and that they have a collateral purpose in relation to the conduct of the costs reference.
It is noted that the plaintiffs have been developing their conspiracy theories for some years. It is said that this is not a case where a plaintiff has speedily commenced an action and not had sufficient time to elucidate the claim; rather, that it is the incomplete product of an iterative process of the development of a conspiracy theory, or theories, previously alleged in similar or related forms in multiple courts. So, for example, it is noted that the majority of the amendments in the proposed amended statement of claim concern matters which pre-date the commencement of this proceeding, and that no explanation is advanced as to why those matters were not pleaded from the outset.
Pausing here, although the plaintiffs now maintain that the proceeding could be advanced notwithstanding that the assignment has not occurred and the further contemplated proccedings not yet commenced, that position is inconsistent with at least the plaintiffs' earlier stated preference (see the 11 September 2020 letter). In any event, it is significant in my opinion that the plaintiffs have made clear that they do not believe they are presently in a position to progress their claims against the defendants, which would leave in abeyance the very serious allegations here made against the defendants if the proceedings were to remain on foot.
Complaint is made that the plaintiffs saw fit to commence the present proceedings notwithstanding that they appear to have accepted from the outset that the statement of claim required amendment and therefore could not go forward. (That proposition is unarguable having regard to the plaintiffs' own correspondence.) As adverted to above, complaint is made that the overwhelming proportion (if not all) of the new allegations sought to be advanced in the proposed amended statement of claim concern matters which occurred before the commencement of these proceedings on 22 April 2020, and yet no explanation is proffered as to why those historical matters (plainly known to the plaintiffs), were not sought to be pleaded earlier.
The defendants maintain that the serious (including criminal) conspiracy allegations in the proposed amended statement of claim are fanciful in the extreme; scandalous; and the type of allegations that should never be made in the absence of clear and cogent evidence. It is said that this is particularly the case where the plaintiffs are themselves legal practitioners who are well placed to know the limited circumstances in which such serious allegations can and should be made (and have been repeatedly criticised in the past for the making of serious conspiracy allegations without basis and have been referred to the Office of the Legal Services Commissioner for so doing). It is said (with some force in my opinion) that the allegations against the defendants can be aptly described as in the nature of "fevered imaginings" (to use the words of Bromwich J in Young v Hughes Trueman at [93]).
Pausing here, to my mind it is ironic, to say the least, that some of the matters about which much complaint is made by the plaintiffs relate to the way in which allegations of impropriety against Mr Newell and/or Mr Muriniti in relation to the De Costi proceedings (such as those relating to the impermissible tape recording issue or impropriety of dealing with witnesses or fabrication of false evidence) were made and dealt with (about which Mr Newell takes much umbrage); yet Mr Newell appears remarkably sanguine about the making of serious allegations of criminal conduct against a raft of other practitioners and leaving those allegations in abeyance for some unknown period of time.
As to the complaint that the plaintiffs are seeking to re-litigate issues and factual allegations that previously have been determined the defendants point to the following: the allegations made in relation to the assertion by the plaintiffs that the claim for personal costs in relation to the joinder of Mrs Costi was improper (which issue has been considered in De Costi (No 4) at [177]-[178]; De Costi (No 6) at [28]-[33]; Newell v De Costi); the allegations relating to the "Shnider Outline" as made against Mr Thorpe and Ms Ng been previously considered in De Costi (No 6) at [89]-[93]; and Newell v De Costi at [202]ff); the allegations as to the defendants' "manifestly false" assertions concerning the eight versons of the fifth amended cross-claim (see De Costi (No 3) at [81]; De Costi (No 6) at [41]-[46]; and Newell v De Costi at [97]ff); the allegations relating to the "Blind Freddy Email" as made against Mr Thorpe and Ms Ng (De Costi (No 6) at [63]-[64]); the false affidavit allegations against Mr Thorpe and Ms Ng in De Costi (No 6) at [67]ff; and Newell v De Costi at [164]ff); the allegations as against Mr Thorpe and Ms Ng relating to the concealement allegation (De Costi (No 6) at [78] and [79]); Newell v De Costi at [186] and 251) and the allegations relating to the affidavit of Mr Kevin Ng having no forensic purpose (De Costi (No 6) at [82]; Newell v De Costi at [196]-[200]). It is submitted that if the plaintiffs are to establish the conspiracy as currently pleaded, then the plaintiffs must re-argue and re-litigate issues that have already been determined in those earlier proceedings, many of which were determined by an intermediate appellate court. As to the issue of re-litigation of proceedings already determined, it is noted that the plaintiffs rely on conduct alleged to have been taken by Suncorp and Mr Watson SC in the De Costi Costs Application and the Shnider Costs Application leading to the De Costi (No 4) judgment, the De Costi Costs judgment (being De Costi (No 6)) and the De Costi Costs Appeal judgment (being Newell v De Costi). The plaintiffs allege that Mr Watson SC, on the instructions of Suncorp, failed to make certain submissions at each of these stages of the costs proceedings.
It is noted that the plaintiffs rely on conduct alleged to have been taken by Suncorp and Mr Watson SC in the De Costi Costs Application and the Shnider Costs Application leading to the De Costi (No 4) judgment, the De Costi Costs judgment (being De Costi (No 6)) and the De Costi Costs Appeal judgment (being Newell v De Costi). The plaintiffs allege that Mr Watson SC, on the instructions of Suncorp, failed to make certain submissions at each of these stages of the costs proceedings.
The Suncorp defendants say that, to succeed in the conspiracy claim (leaving aside the deficiencies otherwise identified in the pleading), it would be necessary for this Court to review: the conduct in the Wachtenheim cross-claim (it being noted that many of the matters alleged in these proceedings in respect of the Wachtenheim cross-claim have been dealt with in the Wachtenheim judgment (being De Costi (No 3)) after a hearing that occupied 75 days); the proceedings leading to the De Costi (No 4) judgment; the proceedings leading to the De Costi Costs judgment (being De Costi (No 6)); and the proceedings leading to the De Costi Costs Appeal judgment (being Newell v De Costi).
It is said that such review would be necessary to ascertain whether there was any such failure by Mr Watson SC (which is denied), and whether, in the absence of any direct evidence of fraud, the failure by Mr Watson SC to make certain submissions could only be explained by impropriety or fraud; and that it would then be necessary for the Court to determine whether that failure then caused injury to the plaintiffs (that is, whether any of the previous findings of the Court in the De Costi Costs Application or the Wachtenheim cross-claim were wrong). The Suncorp defendants say that this is, in the circumstances, a circuitous attempt to challenge the concluded findings of the De Costi Costs Application and to re-litigate matters that have already been heard and determined over many years, and in respect of matters that have relevantly been finally determined in the Court of Appeal.
Thus it is said that the present proceeding is an attempt by the plaintiffs to relitigate proceedings that have been finally determined against their interests. It is noted that substantial time, cost and judicial resources have been expended on the resolution of issues in the Wachtenheim cross-claim and the De Costi costs proceedings. It is said that to re-open those issues and findings of fact because the plaintiffs have made vague, inconsistent and unsupported allegations of fraud and conspiracy dating back many years would be wholly oppressive and unfair to the defendants. It would undermine the principle of finality and indeed would bring the administration of justice into disrepute amongst right thinking people.
Thus it is said that the proceedings are an abuse of process (citing Walton v Gardiner (1993) 177 CLR 379; [1993] HCA 77 (Walton v Gardiner) at 393 (Mason CJ and Deane and Dawson JJ); Hammond v State of New South Wales [2013] NSWSC 1930 (Hammond) at [43]-[45] (Adamson J) upheld on appeal in Hammond v State of New South Wales [2015] NSWCA 304 (Emmett and Gleeson JJA); Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142 (Rippon v Chilcotin) (Handley JA, Mason P and Heydon JA agreeing); and Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 at 410-414 (Hunt J)).
Further, the defendants note that the plaintiffs have previously and repeatedly brought unsuccessful claims of conspiracy on their own behalf or on behalf of others, which have been criticised as having been conducted without regard to the factual or legal requirements for such serious claims, as a result of which the plaintiffs have had numerous personal costs orders made against them (and which, ironically, would seem to provide a reasonable explanation for the non-renewal of professional indemnity insurance or an increase in premiums, which seems to be the crux of the conspiracy here alleged).
It is submitted that, globally, the only way in which the claim sought to be advanced in the proposed amended statement of claim could succeed (even if it were properly pleaded) would be if any rational or plausible thesis for the plaintiffs' litigation failures (other than the fanciful and unlikely conspiracy theories that the plaintiffs here advance) were to be excluded. In this regard, the defendants submit that the reasoning of Lee J in Young v Hughes Trueman (No 4) at [51] (which I have extracted in the introduction to these reasons), is apposite.
It is in this context that various rhetorical questions were posed as to what possible interest the disparate groups of defendants would have in the alleged ultimate objective of the conspiracy or conspiracies here alleged.
The Lawcover/YPOL defendants, for example, ask: what possible interest the Lawcover defendants (or the YPOL defendants assuming they are alleged to have shared the "ultimate purpose" of the alleged conspiracy) could have in Mrs Young's neighbourhood drainage dispute; why an insurer (Lawcover), acting rationally, would promote claims against itself; and what interest Lawcover (who was not Mr Newell's insurer) would have in interfering in Mr Newell's professional indemnity insurance arrangements. It is noted that there is no evidence of any "adverse underwriting consequences" for Mr Muriniti but, even assuming there were such consequences, it is said that there could never be any suggestion that any conduct of Lawcover has caused Mr Muriniti to cease legal practice.
As to the YPOL defendants, it is said that the conspiracy sought to be advanced requires an assumption (contrary to ordinary experience) that experienced solicitors would act contrary to their client's interests and inconsistently with their fundamental contractual, fiduciary and common law duties and ethical obligations. The Lawcover/YPOL defendants ask why professional solicitors such as Mr Yeldham and Ms Vitalone (and Mr Lloyd SC as the retained barrister arguing the case) would conspire with the Lawcover defendants or anyone else to conduct Mr Muriniti's defence of a personal costs claim as some sort of sham to promote the claim against him, engineer a judgment against him and increase Lawcover's exposure whilst also risking their own professional reputation and practising certificates.
Similarly, the Suncorp defendants say that it is impossible to comprehend why Mr Watson SC would have any interest in participating in an unlawful conspiracy against Mr Newell (the very person for whom he was appearing in the personal costs applications), in deliberate contravention of his professional obligations, and for the benefit of his opponents with whom Mr Watson SC had no relationship; nor why Mr Watson SC would have any interest in participating in a conspiracy directed to Mrs Young, a person about whom he is not alleged to have had any prior knowledge, and against whom there is no allegation of facts from which an inference of personal animus could be drawn. Further, it is said that the Court would have to accept that, despite Mr Watson SC's alleged intention to injure Mr Newell, he was such a hopeless conspirator that (contrary to the object of the conspiracy) he managed to achieve a considerable degree of success during the course of his representation of Newell, both at first instance before Taylor SC DCJ and subsequently in the Court of Appeal. The Suncorp defendants say that, at this level of generality, even in its own terms, the claim advanced against Mr Watson SC in the proposed amended statement of claim is fanciful and nonsensical.
Further, complaint is made by the Suncorp defendants (in scathing terms) that some of the criticisms of Mr Watson SC are puerile (referring for example, the allegation that Mr Watson SC represented to the Court that Mr Newell personally did the allegedly illegal taping, "did not acknowledge the true position until the Court pressed him" and that in doing so Mr Watson's intention was to have the Court of Appeal understand that Mr Newell had effected the allegedly illegal recording"). The Suncorp defendants say that this is not reflected by the transcript.
Similar submissions are made by the other defendants. For Mr Holmes, for example, it is submitted that the idea that Mr Holmes acting in the Wachtenheim proceedings would act to impede Mrs Young from conducting unrelated proceedings, or being represented in those proceedings, or that Mr Holmes had any interest in the insurance arrangements of the plaintiffs is absurd (and that nothing is pleaded to establish either of those matters specifically as against Mr Holmes).
Similarly, it is submitted by Mr Doyle Gray that the inherent implausibility that Mr Doyle Gray was party to such a conspiracy is immediately apparent: that there is no possible reason why Mr Doyle Gray would have had any interest in conspiring to prevent the plaintiffs from acting for an unrelated party, namely Mrs Young, in unrelated proceedings in which Mr Doyle Gray had no involvement or interest; and that it is incomprehensible why Mr Doyle Gray (a barrister with no personal interest in the proceedings) would enter into such a conspiracy with such grave potential consequences, including criminal consequences, if it were discovered. A finding of a conspiracy of the kind was not lightly be made (Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; [1992] HCA 66 (Neat Holdings v Karajan Holdings) at [2]). Insofar as the alleged conspiracy is said to have involved "securing a costs liability" by bringing the Trustee Costs Motion, it is noted that on the plaintiffs' own case the conspiracy was a failure. The motion was successfully defended by the plaintiffs' legal representatives (who are alleged to have been party to the conspiracy), no personal costs orders were made against the plaintiffs in respect of the motion, and Ms Thomson was instead ordered to pay the plaintiffs' costs (see the proposed amended statement of claim at [103], [107]). It is said that these circumstances are manifestly inconsistent with the existence of the alleged conspiracy to injure the plaintiffs.
As for Mr Lloyd SC, it is said that it is impossible to comprehend why Mr Lloyd SC (Mr Muriniti's own counsel in the personal costs applications and personal costs appeal) would have any interest in participating in an unlawful and potentially career-ending conspiracy prejudicial to the very person for whom he was appearing, in deliberate contravention of his obligations, and for the benefit of his opponents; and that it is equally impossible to comprehend why Mr Lloyd SC would have any interest in maintaining or pursuing a conspiracy directed to some other unrelated person, namely Mrs Young, in some entirely unrelated neighbourhood dispute. Indeed, it is submitted that if a conspiracy adverse to Mr Muriniti existed and involved Mr Lloyd SC, then Mr Lloyd SC must have been something of a Clouseau-like participant in the scheme, playing his part so clumsily as unwittingly to stumble upon a fair degree of success during the course of his representation of Mr Muriniti, quite contrary to the wishes and purpose of the alleged conspirators. It is submitted that there is no reason to think this was so, or to regard the success that was enjoyed as being the product of anything other than Mr Lloyd's genuine efforts to represent Mr Muriniti (a proposition that runs entirely counter to the claim Mr Muriniti now makes).
For Mr Andrew, it is submitted that an inference that Mr Andrew agreed with others to join a conspiracy to pervert the course of justice is illogical; that not only is the suggested conspiracy itself fanciful, it is even more ludicrous to infer that the existing parties to the conspiracy were prepared to invite another person to join in the conspiracy, potentially risking exposure, in circumstances where: Mr Andrew is an officer of the court; and by the time Mr Andrew is alleged to have joined the conspiracy in February 2016, acts alleged taken in furtherance of the conspiracy had occurred over a course of a number of years. For example, it is noted that, on the plaintiffs' case, witnesses had been bribed, false evidence had been given, Taylor SC DCJ had found that the a tape recording had been illegally obtained, the stage one hearing of the costs applications dealing with the presumption under s 349 of the Legal Profession Act 2004 (NSW) had occurred, advices had been provided to insurers regarding substantial costs liabilities, and Mr Newell had provided instructions not to give evidence at the stage two hearing of the costs applications.
The defendants cavil with the proposition that the ultimate quantification of known and identifiable categories of wasted costs (as identified by the Court of Appeal in Newell v De Costi) could inform the pleading of the alleged conspiracies; and complain as to the proposition that this proceeding cannot be progressed until such time as further separate proceedings (which are dependent on an assignment of the asserted cause of action) are commenced.
Relevantly, it is the contention of the Lawcover/YPOL defendants (and there was no suggestion to the contrary by other defendants) that there are no apparent limitation issues given that the plaintiffs' case is premised on an allegedly concealed fraudulent conspiracy. Thus, it is submitted that there was no requirement for the plaintiffs urgently to commence the proceeding and to make the serious and wide-ranging allegations prior to the plaintiffs satisfying the various contingencies they have identified and properly pleading the allegations and identifying all relevant material facts upon which they rely. (I see much force in this submission.)
Complaint is also made that the statement of claim has been prepared inconsistently with the requirements of, inter alia, rr 14.7, 14.8, 14.14, 15.3, 15.4, 15.9 and 19.5 of the UCPR, and contrary (it is said) to the plaintiffs' own professional obligations under rules 21.2-21.4 of the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (NSW) (Australian Solicitors' Conduct Rules).
The provisions of the Australian Solicitors' Conduct Rules to which the defendants point in this context provide that: 21.2 A solicitor must take care to ensure that decisions by the solicitor to make allegations or suggestions under privilege against any person: 21.2.1 are reasonably justified by the material then available to the solicitor; … […] 21.3 A solicitor must not allege any matter of fact in: 21.3.1 any court document settled by the solicitor, […] unless the solicitor believes on reasonable grounds that the factual material already available provides a proper basis to do so. 21.4 A solicitor must not allege any matter of fact amounting to criminality, fraud or other serious misconduct against any person unless the solicitor believes on reasonable grounds that: 21.4.1 available material by which the allegation could be supported provides a proper basis for it […]
Finally, there is the issue of delay and the impact of the proceedings on the defendants and on the Court's resources. It is submitted that the undue prolongation of the present proceeding (containing, as already noted, the most serious of allegations), causes obvious and unnecessary stress and potential reputational damage to many defendants, including practising solicitors and barristers; and it is noted that the stress of ongoing litigation is a prejudice to litigants (referring to what was said in the Court of Appeal in Young v Hones (No 2) at [93] (Bathurst CJ with whom Emmett JA and I agreed); and the reference there to what was said in Jackamarra v Krakouer (1998) 195 CLR 516; [1998] HCA 27 (Jackamarra v Krakouer) at 526 as to prejudice arising from delay (which I note included the recognition that legal practitioners are officers of the Court and that allegations of fraud made against them in the conduct of litigation are very serious allegations).
The defendants submit that the present proceeding should not be permitted to hang over the heads of the defendants while the plaintiffs address various contingencies or promulgate further conspiracies over some indeterminate and uncertain period (particularly, where it is said that there can be no confidence that further time will improve the case that has so far been advanced).
It is said that the continuation of the proceeding will result in significant wasted costs and Court resources (and that, as the plaintiffs are already involved in Federal Court proceedings in which they seek to set aside bankruptcy notices relating to an unsatisfied judgment debt of this Court entered on 16 May 2018, there must be a real issue as to the plaintiffs' ability to meet the substantial costs incurred (and to be incurred) by the 23 defendants to the present proceedings).
As to the alternative relief sought (dismissal with costs for want of prosecution), this is put by the defendants on the basis that no progress has been made since the commencement of the proceeding in April 2020 and that the plaintiffs' stated position is that they cannot be progressed and should be stayed.

[8]

Advocate's immunity

Various of the defendants invoke the principle of advocate's or witness' immunity, referring to various authorities including Bodycorp Repairers Pty Ltd v Australian Associated Motor Insurers Ltd [2018] VSCA 174 (Bodycorp) (which relied upon and the decision of the High Court in Cabassi v Vila (1940) 64 CLR 130; [1940] HCA 41 (Cabassi v Vila)); the observations of Macfarlan JA in Leerdam v Noori (2009) 255 ALR 553; [2009] NSWCA 90 at [140]ff (which relied on the reasoning of the High Court in D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; [2005] HCA 12); Hamod v New South Wales [2011] NSWCA 375 at [725] (Beazley JA, as Her Excellency then was); and Young v Hones [2014] NSWCA 337 at [228]. It is said that reliance on the immunity is not affected by the later High Court decision in Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1; [2016] HCA 16 (Attwells). (To the extent that the plaintiffs rely on Swinfen v Lord Chelmsford (1860) 5 H&N 890; (1860) 157 ER 1436 (Swinfen), it is said that this reliance is misplaced. It is submitted that the plaintiffs' claim should be summarily dismissed (as against those defendants invoking such immunity) on the basis that the claims cannot succeed; noting that this issue is a question of law.
Insofar as the plaintiffs rely upon the fraud exception to the principle of finality as a basis for qualifying the reach of advocate's immunity, it is said by the defendants that this reasoning is flawed. The Suncorp defendants submit that the aim of the fraud exception to the principle of finality is to preserve the integrity of the judicial process; that it is an extraordinary remedy in the sense that circumstances in which it is available are extremely limited, and requires actual fraud on the part of the successful party; and that the remedy itself is limited to empowering the court to rescind the judgment, thereby depriving the fraudulent party of their ill-gotten gains. It is said that it does authorise a claim for damages against a non-party; and does authorise a collateral challenge to findings made in the underlying proceedings.

[10]

Lawcover/YPOL defendants

As to the claims made in the proposed amended statement of claim against the Lawcover defendants, the first of those is the allegation (described by the defendants as the primary and overarching conspiracy) that the Lawcover defendants, by no later than mid 2011, conspired with Suncorp, the De Costi Parties, witnesses and legal representatives in the De Costi proceeding, and the Searle Parties, to "secure a costs liability unwarranted by the known facts which provided a claimable basis" for Suncorp to decline to renew Mr Newell's professional indemnity insurance and for Lawcover to create "adverse underwriting consequences" for Mr Muriniti; that this was by "combining to deny the District Court knowledge of the true circumstances of costs applications" against the plaintiffs; and that it was with the "ultimate purpose" of preventing, or intimidating, the plaintiffs from acting for Mrs Young; and with the unlawful objects of perverting the course of justice (by denying the District Court knowledge of the true circumstances of the costs applications and by denying Mrs Young legal representation by the plaintiffs, and thereby impeding the conduct of proceedings by her (see proposed amended statement of claim at [32]-[34]).
It is said that there is some ambiguity in the pleading but that it appears that Lawcover is also alleged to have, inter alia, engaged in a "systematic collusion" in breach of s 319 of the Crimes Act, with the overarching purpose of perverting the course of justice (35); committed "deliberate and systematic breaches" of its duties of good faith (35); (perhaps) "effecting or causing to be effected deliberate breaches of fiduciary duty and professional obligations" by the YPOL defendants (35); entered into various (apparently to be inferred) agreements or understandings with, inter alios, Mr Muriniti's opposing parties in litigation (see at 72, 76 IV; 83, [93], [149], [150], [152]); from and after March 2015 "[maintained] the conspiracy" and "[conspired] to achieve a basis for a costs liability" on the part of the plaintiffs "which conduct in the premises amounted to a perverting of the course of justice" ([108]); concealed information from Mr Muriniti (82); and agreed with Suncorp to defraud Mr Muriniti and Mr Newell of their rights to sue Ms Thomson and the Searle Parties (151).
As to the second defendant, Ms Baxter, it is alleged, inter alia, that she: personally owed contractual and statutory duties of utmost good faith to Mr Muriniti (despite Lawcover, rather than Ms Baxter, being the insurer) ([28]); agreed with the YPOL defendants and the De Costi Solicitors to conceal the circumstances of an implication contained in an affidavit sworn by Ms Vitalone ([136]); compelled Mr Muriniti to consent to making a joint offer of settlement (138); and caught Mr Yeldham's "eye with a look of alarm" (at a meeting on 13 March 2017 when Mr Muriniti is alleged to have asked Mr Yeldham who had drafted a deed of release that Mr Muriniti said he had no intention to sign and Mr Yeldham said that he had) (151).
Pausing here, the "look of alarm" allegation highlights to my mind a very real pleading problem with parts of the claim as presently outlined in the proposed amended statement of claim. The apparently narrative stance adopted in the proposed amended statement of claim gives rise in places to what can only be described as embarrassing pleadings - in that how does one respond to an allegation that someone caught someone's eye with a "look of alarm"? This is surely a matter of evidence not of pleading.
As to the YPOL defendants, they are alleged to have, inter alia, "joined" the conspiracy referred to above no later than May 2013 (32); engaged in a "systematic collusion" in breach of s 319 of the Crimes Act, with the overarching purpose of perverting the course of justice (35); and (perhaps, although the Lawcover/YPOL defendants perceive this to be ambiguous) "effecting or causing to be effected deliberate breaches of fiduciary duty and professional obligations" by themselves and by Counsel (the eighteenth defendant, Mr Lloyd SC) (35); from and after March 2015, "maintained the conspiracy" and "[conspired] to achieve a basis for a costs liability" on the part of the plaintiffs "which conduct in the premises amounted to a perverting of the course of justice" ([108]); knew various matters in connection with the heads of complaint advanced by the De Costi Parties in support of the applications for personal costs orders ([126]); made an offer to resolve the De Costi costs claim "improperly and without the authority of [MrMuriniti]" (138); failed to take points, or make certain submissions, in the course of the hearing of the application for personal costs orders ([147]); which resulted in the findings of Taylor SC DCJ ([148]); and which findings were made as a result of a "collusive agreement" between various of the defendants ([149]); and failed to correct "false representations" allegedly made in the course of the hearing of an appeal against orders made by Taylor SC DCJ (154(v)).
In the case of Mr Yeldham, it is alleged that he also prepared a preliminary advice to Lawcover on 26 July 2013 which it is alleged was deficient in certain respects, and which (possibly) evinced certain intentions on the part of Mr Yeldham ([84]); and prepared an advice to Lawcover and Ms Baxter on 13 November 2013, which inter alia "contended for a major exposure … and provided a false basis to justify and induce [Mr Muriniti] to consent to a settlement" ([85]); prepared an advice to Lawcover on 3 March 2015, which is said to have been intended to promote the legitimacy of certain claims advanced by the De Costi Parties, with the consequence that Mr Yeldham is alleged to have "continued to hold the intention pleaded at paragraph 51(b)" (which the plaintiffs note is an incorrect cross-reference) ([127]); and gave certain advice to Lawcover, which recommended a "peculiarly generous" offer of settlement ([137]).
In the case of Ms Vitalone, it is alleged that she swore an affidavit which contained a knowingly false implied allegation as to the circumstances in which an affidavit came to be on Mr Muriniti's file, and concocted a scheme to "plant" evidence on Mr Muriniti's file ([131]-[136]). (In other words, a very serious allegation of perjury is here made.)
As adverted to above, the Lawcover/YPOL defendants say that the difficulties with the proposed amended statement of claim and the plaintiffs' case are compounded by the number of conspirators alleged to have agreed to conspire, conceal and pervert the course of justice over time: 23 alleged conspirators many from entirely disparate camps: (a) the De Costi Parties and their lawyers; (b) Lawcover and its lawyers; (c) Suncorp and its lawyers; and (d) Mr Shnider's trustee in bankruptcy and her lawyers. The Lawcover/YPOL defendants say that the notion that all of these different groups and the individuals comprising them would join together in conspiracies of the kind alleged is highly implausible and unlikely; and they say that there is no rational motive for the alleged conspirators to partake in such conduct. They also say that there is no evidence to support the allegations (although, of course, the time for filing evidence has not yet arrived).
Particular difficulty is identified with a number of the allegations in the proposed amended statement of claim so far as they related to the Lawcover and/or YPOL defendants. (Given that this is not a strike out application, and - despite the alternative claim for relief by the plaintiffs, they do not actually seek to progress this version of the pleading, it is not necessary to deal with these exhaustively. However, it is relevant to note the complaints made about the proposed pleading insofar as the force of those complaints tends towards a dismissal or permanent stay of the proceeding.)
Complaint is also made that in many respects the pleading recites in considerable detail matters that are irrelevant (or the relevance of which is not apparent on the face of the pleading). For example, the Suncorp defendants say that it is not apparent why it is material to the conspiracy allegations to plead the claim by Mrs Young in the Land and Environment Court, the role of Mr Hones and Mr Hemmings in those proceedings, Mrs Young's subsequent negligence proceedings in the Supreme Court, and damages proceedings commenced in the District Court. (These are matters that apparently sought to be raised in the proposed further proceedings.)

[12]

Suncorp

As against Suncorp, the proposed amended statement of claim commences with the allegation at [29] that Suncorp owed its insured (Mr Newell) duties of good faith, including by reason of ss 13 and 14 of the Insurance Contracts Act. (The Suncorp defendants say that this is uncontroversial but irrelevant.) The alleged breaches of s 13 are the failure "to take any steps to bring to an early and cost protective conclusion the Trustee [Costs] Claim in order to protect Newell's claims history", and the decision not to renew Mr Newell's professional indemnity policy.
At [44] of the proposed amended statement of claim, after a number of paragraphs dealing with Mrs Young's litigation against the Kings, it is alleged that Suncorp was the professional indemnity insurer of Mr Hemmings (the barrister who had acted for Mrs Young at the time she settled her claim in the Land and Environment Court against the Kings and who was himself then sued by Mrs Young in the negligence proceedings in this Court). The Suncorp defendants say that (although it is not entirely clear), there is a suggestion that, in defending those proceedings, Suncorp improperly filed a defence that was not maintainable. At [46], the allegation is that the defence was "problematic" for the reasons pleaded at [38], which paragraph in turn asserts that the premise (defined at [37]) of a document (Exhibit A) for works in relation to a retaining wall proposed to be constructed (which document had been "created by a conclave of experts on the first day of the hearing" - see [36]) "could not be reconciled with what was held out to Mrs Young and the LEC concerning the nature of the problem and the solution the subject of the Consent Undertaking".
It is further alleged (at 46) that the defence "conformed to the presupposition that Mrs. Young would be imminently bound by the Independent Expert Agreement pre-empting the need for the Negligence Proceedings to progress to a hearing".
At [50] of the proposed amended statement of claim it is alleged that Suncorp (and Lawcover) were faced with a "predicament" in that, as evidence on behalf of Mr Hones and Mr Hemmings was due in September 2011, if the proeceedings were to "continue on their course", Suncorp (and Lawcover) would have to cause evidence to be filed "explaining the Defences", which evidence it is said could not be reconciled with what Mr Hones and Mr Hemmings had held out to Mrs Young as recorded in transcript of proceedings in the Land and Environment Court.
What follows is to my mind an allegation that highlights the propensity of the plaintiffs to see a conspiracy in otherwise seemingly innocuous events. It is alleged at [52] that the defendants in the negligence proceedings were ordered to file their lay and expert evidence by 9 September 2011; at [53], that on 23 June 2011 the plaintiffs and Mrs Young attended the District Court for a directions hearing in a "related District Court case" (having - see [51] - been criticised for delay in that matter at an earlier directions hearing) and "encountered a large collection of persons at the Court for the directions hearing which persons were not directly connected to the District Court proceedings and had not previously attended any listing in the District Court matter", including senior counsel and the solicitor for Suncorp retained in the negligence proceedings (as well as a solicitor retained by Lawcover in the negligence proceedings and members of the King family).
What is drawn by the plaintiffs from [52] and [53] is that Suncorp (and Lawcover) attended the District Court (at the directions hearing in the related case) "through representatives" in the "hope of finding" that Mrs Young would find herself without lawyers and the need to file the Explanatory Evidence would dissolve.
What is then alleged is that the solicitors retained by Suncorp in the negligence proceedings announced an intention to file an application to dismiss the negligence proceedings ([55] and that, on 26 August 2011, Suncorp caused to be filed an application to dismiss the negiglence proceedings for want of prosecution) (as also did Lawcover on 29 August 2011) ([56]). It is alleged that: 56) On 26 August 2011 Suncorp herein caused to be filed an application to dismiss the Negligence Proceedings for want of prosecution and on 29 August 2011 Lawcover herein filed an application to dismiss those proceedings. ("the Dismissal Applications"). The Dismissal Applications had no prospects of success in that there was no evidence that Mrs. Young did not intend to prosecute the Negligence Proceedings and considerable evidence that she did. In the premises: (a) The Dismissal Applications could serve no other purpose except to produce a delay of 6 months in interlocutory steps thereby delaying the need to file the Explanatory Evidence; and, (b) At the end of 6 months Lawcover and Suncorp would have to either cause to be filed the Explanatory Evidence or to find another means to pre-empt the need to do so.
I note that the Suncorp defendants say that the notice of motion filed in August 2011 was in fact an application to strike out the statement of claim (not for dismissal for want of prosecution); and that this application was listed for hearing on 31 January 2012 and was adjourned on that day because Mr Muriniti had filed an application for a stay of proceedings pending the determination of other proceedings in the Land and Environment Court, and Mr Newell had advised the Court that the statement of claim in respect of which the strikeout application had been filed was not the version of the statement of claim on which Mrs Young wished to proceed to hearing (seemingly a familiar refrain having regard to the position here taken). It is said that the application was subsequently amended in March 2012 to include an application for dismissal for want of prosecution (which was made in circumstances where Mrs Young had by that stage breached no less than five orders for the provision of proposed amendments to the statement of claim, and had provided no less than seven different versions of those proposed amendments).
The next allegation relating to Suncorp relates to the application for dismissal of the Wachtenheim cross-claim made by the De Costi Parties in February 2012 (in which personal costs orders were sought against Mr Muriniti and Mr Newell) (the February Costs Application) (see at [65])). The plainitffs allege (at [66] of the proposed amended statement of claim) that that application was supported by an allegation that various affidavits filed in support of the Wachtenheim cross-claim had been fabricated by Mr Muriniti and Mr Newell. The allegation as presently frames is that. 66) The February Motion was supported as follows: (a) An affidavit sworn by Andrew Thorpe on 31 January 2012 which: i. Annexed the November Emails in which Muriniti indicated to the accountant Mr. Birrell that as at 24 November 2011 Wachtenheim had indicated to Muriniti that the only explanation that he could think of for the missing $150,000 was by reason of cash taken from the till for Wachtenheim's personal expenses and wages; and, ii. Made the implicit allegation that the Affidavits of Wachtenheim sworn 15 December 2011, and Andrew Osborne Sworn 15 December 2011 ("the December Affidavits") (which contended that a large proportion of the $150,000 had been paid out for wages of the business) had been fabricated by Muriniti and Newell ("the False Affidavits Allegation"). (b) An affidavit of Kevin Ng which deposed that Ng withdrew assertions in an affidavit drafted by Muriniti after three conferences and sworn on 18 March 2010 which were thereby implied to be false and which alleged that he had been overborne in the course of preparing the affidavit with the result that it did not contain his true evidence. (c) The only purpose served by the Kevin Ng affidavit was to corroborate a suggestion that Muriniti and Newell had approached the cross-claim with a propensity to fabricate evidence of the lack of profitability of a franchise business in that: i. The Kevin Ng affidavit was of secondary importance to the Wachtenheim claim. ii. The evidence concerned De Costis parties maintained the position that the conduct of other franchises was irrelevant to the issues in the cross- claim; and, iii. Kevin Ng was an unimpressive witness of limited lucidity whose evidence was unlikely to have any impact. iv. In the premises of (i), (ii) and (iii) the Kevin Ng Affidavit was of no utility except to corroborate an intended claim that Muriniti fabricated Wachtenheim's evidence of loss. (d) The draft affidavit by Stephen Vial ('Vial") the effect of which was that Vial withdrew almost entirely what he had deposed to in the June affidavit with the implication that Muriniti had procured false evidence. Particulars The Vial Draft Affidavit was intended to be used in the application in that (i) The de Costi parties had prepared it in the lead-up to the application; and, (ii) On 25 January 2012 de Costis caused Vial to seek independent advice from a solicitor named McMinn as to whether he should was false. (e) In the premises of (b) and (c) Ng's evidence and Vial's evidence was inherently improbable in that it required acceptance that Ng and Vial had read and sworn their affidavits that were largely false in circumstances that Muriniti and Newell were responsible for the falsehoods and Ng and Vial was not responsible.
The plaintiffs allege that the February Costs Application could only have been brought in circumstances where the De Costi Parties had "special knowledge" that they were not at risk in making those applications and the benefit of an agreement with Suncorp that Suncorp would defend the February Costs Application against Mr Newell in such a way as to ensure that the falsity of the evidence in support of the application was not exposed, and that Suncorp would use its control of the application to "effect an outcome resulting in a costs liability" in Mr Newell (see at [72]).
At [87], allegations are made that are premised on the giving of instructions by Suncorp. It is alleged that Mr O'Connor "acting on the instructions of Suncorp" falsely represented to Mr Newell that a mediation order made in the De Costi proceedings (in relation to the De Costi Costs Application) was made of the Court's own motion and that it was the usual order in claims for costs against a legal practitioner. It is alleged that Mr O'Connor "on the instructions of Suncorp" did not wish to disclose true purpose of the mediation "and by implications [sic] the recommendations informing the proposed conduct of the de Costis [sic] Costs Claim which recommendations justified consenting to the mediation order".
The next allegation (seemingly, though again not expressly made against Suncorp) to which reference is made by the Suncorp defendants is the allegation at [93], on the foundation of which the Trustee Costs Claim was allegedly brought, of an agreement or understanding that Lawcover and Suncorp would use their endeavours to afford a settlement for Ms Thomson notwithstanding the lack of reasonable prospects of that cross-claim and/or to hold Ms Thomson and the Searle Parties harmless from effecting an abuse of process.
At 94, it is alleged that Suncorp, in breach of an obligation of good faith, did not take "any steps to bring to an early and cost protective conclusion the Trustee Claim in order to protect Newell's claims history" and at 94 "deliberately departed from customary practice in the interests of cost efficient management of the Trustee Costs Claim" by omitting to instruct the Gadens Lawyers to convey "an offer at an early stage that each party walk away and pay their own costs".
At [97], the allegation is made that Suncorp's non-renewal decision (in respect of Mr Newell) conveyed by the letter dated 24 April 2014 (Non-Renewal Letter) was in bad faith in breach of s 13 of the Insurance Contracts Act. The reason it is alleged to have been in bad faith is that "there was no proper underwriting reason [not to renew the policy] as no money had been paid and no reasons concerning the merits of the claims were offered to Newell".
The next allegation against Suncorp relates to a discussion that Mr Newell had with Mr Geoff Connellan, of Moray and Agnew Solicitors, who had been retained by Suncorp to act in relation to the personal costs orders being sought in the Young v King proceedings (see from [98]). The plaintiffs allege (at [102]) that this meeting was organised on a false pretext (and was part of a scheme to exploit Mr Newell's reaction to the Non-Renewal Letter). It is alleged that the true purpose of the Connellan meeting was to "underwrite a discussion in which the risks associated with acting for Mrs Young could be examined in the context of the non-renewal". It is further alleged that both the claims and underwriting arms of Suncorp "expected that Newell would raise the fact of his non-renewal to allow the discussion … to occur and when it did not the fact was reported to underwriting". (The Suncorp defendants say that it is entirely unclear how this conversation or the circumstances in which it occurred are material to Mr Newell's claim.)
The next allegation against Suncorp is as to the decision made by Suncorp, on the advice of Mr Watson SC, not to seek indemnity costs on the disconstinuance of the Trustee Costs Claim (see at [105]). This is the point at which it is said that Mr Watson SC joined the conspiracy. It is alleged that Lawcover and Suncorp "had a fixed antipathy to holding [Ms] Thomson responsible for an application which was an abuse of process and procured their lawyers to assist in not holding [Ms] Thomson accountable". (The Suncorp defendants say that it is difficult to see how such a decision, about matters on which reasonable minds might differ, could be evidence of, or constitute the furtherance of, the conspiracy against Mr Newell.)
At [108] it is alleged that, from and after March 2015, the De Costi Lawyers, on the instructions and with the authority of the De Costi Parties, and the Lawcover Lawyers on the instructions of the Lawcover Parties, the Gadens Lawyers (which, by reference to 27 may encompass an allegation that the conduct of Gadens Lawyers was on instructions from Suncorp) and Mr Watson "maintained the conspiracy" (which I interpose to note that Mr Watson had only at that stage just allegedly joined) colluded "to achieve a basis for a costs liability by perpetuating and inflating or overstating the Residual Claims without regard to their merits which conduct amounted to a perverting of the course of justice".
There are further allegations as to Suncorp's response to Mr Newell's inquiries about the reasons for the non-renewal and requests for advices to Suncorp about the merits of the De Costi Costs Application and the Trustee Costs Application (see [115]-[116]). The Suncorp defendants say that the relevance of these allegations is "somewhat opaque".
At [117]-[125] of the proposed amended statement of claim the plaintiffs set out a succession of facts and circumstances (relating to: the Illegal Recording Allegation; the Kevin Ng Evidence Allegation; the Shnider Outline Allegation; the Excessive Amendments Allegation; the Shnider Conference Allegation; the Dent Instructions Allegation (Mr Dent being an expert witness and the recipient of the so-called Blind Freddy email); the False Affidavits Allegation; the Wachtenheim Diary Allegation; and the Shnider Correspondence Allegation) said to have been known to the De Costi Parties and to "the Suncorp Lawyers" (an undefined term) and the Lawcover Lawyers (but not alleged to have been known by Suncorp itself). Those facts and circumstances, as I understand the pleading, are relied upon as being inconsistent with the allegations being made against Mr Newell that were said by the De Costi Parties to have warranted personal costs orders. The allegation at [126] is that the facts and circumstances were apparent from the court record and that, in the premises, the allegations pleaded at [110] and [111] were "brought and maintained by the de Costi Parties in the knowledge or expectation that no reasonable steps would be taken by Lawcover and Suncorp to defend the allegations".
It Is then alleged that (in the premises of the allegations at [139] and [140]), the Suncorp Lawyers (Ms Blacker and Mr O'Connor) (acting supposedly on the instructions of Suncorp, having regard to 27) "sought to avoid being on notice of facts militating against [Mr Newell's] liability to the Residual Claims" and that the Suncorp Lawyers were "intent on facilitating a liability for the Residual Claims to sustain a plausible basis for the non-renewal and a basis to perpetuate obstacles to [Mr] Newell practising as a barrister".
Complaint is made as to the conduct of the costs hearing before Taylor SC DCJ and the Court of Appeal by Mr Watson SC. It is said that, implicitly by reason of 27 and [27](k], and expressly in 154, those failures are alleged to have been done on instructions from Suncorp.
The Suncorp defendants say that, whatever criticisms may be levelled against Mr Watson and his conduct of the costs hearing before Taylor SC DCJ and the Court of Appeal, there is no pleaded basis for inferring that the manner in which the hearings were conducted was on instruction from Suncorp.

[13]

Mr Watson SC

As to Mr Watson SC, as noted above it is alleged that he joined the conspiracy at a time after the Trustee Costs Application had been determined favourably to Mr Newell. The first of the allegations made against him is that he gave advice that an application for indemnity costs (in relation to the Trustee Costs Claim) should not be made as the claim was not hopeless. The Suncorp defendants say that it is impossible to infer an intention to cause harm to Mr Newell from an opinion given by Mr Watson SC (about which reasonable minds might disagree) let alone an intention to do so as part of a conscious combination with either the Gadens Lawyers or Suncorp.
The next complaint about Mr Watson SC relates to the "Watson Meeting" on 11 August 2015. The Suncorp defendants point to the following in respect of the context in which this meeting occurred: that the so-called illegal telephone recording was the subject of a judgment as to admissibility the reasons for which were published on 8 August 2012 (De Costi (No 2)); that, in the absence of evidence from Mr Newell to the contrary on the voir dire, Taylor SC DCJ found that Mr Newell could see Mr Turner's phone, that he understood its purpose (i.e., to record the conversation being conducted with Mr Shnider through Mr Wachtenheim's phone), and that he thought the recording was "a good idea" (De Costi (No 2) at [34]). Taylor SC DCJ also found that the recording was planned before the call, and (again in the absence of evidence to the contrary) that Mr Newell was aware of the plan (De Costi (No 2) at [48]).
The Suncorp defendants accept that it was plain that, in order to resist the De Costi Costs Application (to the extent that it relied upon the illegal telephone recording), it would be necessary for Mr Newell to give evidence. However, it is said that there were other grounds upon which the illegal telephone recording was found to be improper on the part of Mr Newell and warranted exclusion which (even on Mr Newell's own case and even with the benefit of his explanation as to what occurred) could not be justified. Further, it is said that, ultimately, the question of whether or not to give evidence in the De Costi Costs Application was a matter for Mr Newell (noting that Mr Newell was a barrister of some 14 years' standing). It is said that whether or not he should be advised to give evidence was a matter for Mr Watson SC exercising his forensic judgment; and that these are highly contestable matters about which reasonable minds might differ, and for which myriad considerations would need to be brought to bear (beyond the simple question of whether or not to adduce evidence challenging Taylor SC DCJ's findings on that limited issue). The Suncorp defendants submit that there could be no rationally drawn inference that, in giving that advice, Mr Watson SC was participating in and furthering a conspiracy.
I interpose here to note that in the plaintiffs' submissions in response they identify this advice as the "most telling" part of the conspiracy (see below). If so, then this surely casts doubt on the conspiracy claims as a whole, since this is a matter about which there could be any number of innocent explanations.
The remainder of the complaints against Mr Watson SC are in substance criticisms of the manner in which he conducted the costs hearing before Taylor SC DCJ and the hearing in the Court of Appeal. Again, it is said by the Suncorp defendants that these are matters for forensic judgment and do not (individually or collectively) provide a foundation for concluding the existence of either an agreement or an intention to injure.
The Suncorp defendants say that each of the matters by reference to which various adverse inferences are sought to be drawn (at [54], [56], [62], [66] and [74]) is readily explicable by reasons other than the existence of a "grand conspiracy", and that the inferences sought cannot be drawn (citing Lee J's observation in Young v Hughes Trueman (No 4) at [51] to which I have referred above).

[15]

Mr Thorpe and Ms Ng

In relation to the De Costi proceedings (relating to their representation of the De Costi Parties in relation to the Wachtenheim cross-claim) it is alleged that Mr Thorpe and Ms Ng: colluded with a witness (Mr Vial) (74, 74(vii) and 74(ix)(c)); made "deliberate and systematic" breaches of s 56 of the Civil Procedure Act, by "developing false illusory or unmeritorious [issues] for the purposes of causing the [plaintiffs] to be or [to] perceive that they were compelled to give evidence to counterfactual issues about their preparation of evidence in the Wachtenheim Proceedings" (see at 35); and procured Mr Shnider to give evidence favourable to the De Costi Parties for the purpose of compromising the plaintiffs to support the suggestion that they had a propensity to fabricate evidence ([74(b)]).
In relation to the De Costi Costs Application, it is alleged: that Mr Thorpe and Ms Ng: improperly pressed the personal costs claim pursuant to s 345 of the Legal Profession Act in relation to the joinder of Mrs Costi in circumstances where the wasted costs were "negligible" (at 103(i) and 109(iii)) (it being alleged that an affidavit of Sifa Mtango, which informed the claim for costs charged by Mr Thorpe "revealed that there were negligible if any costs incurred which were attributable to the joinder [of Mrs Costi] in the Wachtenheim Proceedings" (80); filed the so-called "August Submissions", which "were framed on the misguided basis that they sought to relitigate the Wachtenheim Proceedings" (80); made the "manifestly false" allegation that there were eight versions of the fifth cross-claim ( 120); gave false evidence to the effect that the plaintiffs improperly conferred with Mr Shnider on 11 October 2007 while Mr Wachtenheim was present, in circumstances where they knew "that evidence existed that Wachtenheim was not present" (110); falsely alleged that the plaintiffs "deliberately prepared false affidavits" for Mr Wachtenheim, Mr Andrew Osborne and Mr Michael Birrell, "and in particular the affidavit sworn 15 December 2011 ('The December Affidavit')", in circumstances where "there was no evidence that the December Affidavit was false or that [Mr Muriniti] could have known or considered that it was false" (110 and 123); alleged that the plaintiffs had concealed and failed to discover Mr Wachtenheim's diary for the financial year 2003-2004, in circumstances where the evidence did not support the allegation (110 and [124]); knew "that the affidavit [of Kevin Ng] had no forensic purpose" (such that allegations made by the McLachlan Thorpe defendants relating to wasted costs arising from it should not have been made) (118); alleged that the plaintiffs had failed to discover correspondence with Mr Shnider (referred to as the so-called "Shnider Emails"), in circumstances where the emails had been annexed to an affidavit of Mr Wachtenheim on 18 August 2011 and accordingly discovered ([111]); alleged, "for the purposes of the Section 99 claim", improper conduct by reference to an outline of the anticipated evidence (the "Shnider Outline") of Mr Shnider (110); alleged that the plaintiffs' instructions to the expert (Mr Dent) in the "Blind Freddy Email" were improper, in circumstances where there was no improper conduct by the plaintiffs (110]); filed a detailed complaint to the Office of Legal Services Commissioner on 15 May 2013 in relation to the illegal recording (78-(f)), and that the filing of the said complaint was "timed to coincide with the arrival of Wachtenheim at [Mr Muriniti's] office [on 16 May 2013] and [Mr Muriniti's] presumed anxiety at receiving the de Costi Complaint" (78); and agreed with Mr Shnider to "create false evidence" to "purport" that Mr Muriniti had fabricated a false statutory declaration" (79), with a view to support the allegation that the plaintiffs had created false affidavits for the purpose of the personal costs applications (79).

[17]

Ms Blacker and Mr O'Connor

The allegations against Ms Blacker and Mr O'Connor in relation to involvement in the alleged conspiracy relate to their representation of Suncorp in respect of the De Costi Costs Application as it concerned Mr Newell. (They did not represent Suncorp in the personal costs applications against Mr Newell in the Young v King proceedings). It is noted that at all relevant times up to around 1 January 2016, Ms Blacker was a partner at Gadens, and Mr O'Connor was an employed solicitor at Gadens; and that at or around 1 January 2016, Ms Blacker and Mr O'Connor left Gadens and joined Barry Nilsson Lawyers.
As against Ms Blacker and Mr O'Connor it is alleged that: Mr O'Connor consented to an order for mediation in August 2013 that was sought by the fourth, fifth, sixth and seventh defendants (the De Costi Parties) ([87]); Mr O'Connor, falsely represented to Mr Newell that the mediation order was made of the Court's own motion, and that Mr O'Connor "on the instructions of [Suncorp] did not wish to disclose the true purpose of the mediation" and knew that the "purpose or intended effect of the ordered mediation needed to be concealed from [Mr Newell]"(87-87); Ms Blacker and Mr O'Connor failed to provide Mr Newell with a copy of the "De Costi Submissions" and "concealed them", in breach of their fiduciary obligations, and that by doing so Ms Blacker and Mr O'Connor denied Mr Newell "the means to give consideration as to the merits of the de Costi Section 345 claim and to engage [Ms Blacker and Mr O'Connor] as to those merits", and the opportunity to agitate for an early dismissal by consent" (88 and 88); and Ms Blacker and Mr O'Connor failed to provide Mr Newell with "advices which had been provided to [Suncorp] concerning the merits and the proposed or recommended conduct of the De Costi Claim and the Shnider Claim" ([89] and [94]).
It is further alleged that Ms Blacker and Mr O'Connor: falsely represented that the "'Suncorp Advices were privileged" (89 and 116) and refused "to state whether [Suncorp] had given instructions to withhold the advices" (89 and 116); and, that, because of the above, Ms Blacker and Mr O'Connor "were in a conflict of interest situation and breached their duty to inform [Mr Newell] of the fact of the conflict and their consequent duty to cease to act" (89 and 116).
It is alleged that Ms Blacker and Mr O'Connor: failed to ascertain the terms of Mr Stanton's costs agreement (in circumstances where the De Costi Costs Application disclosed that Mr Stanton claimed fees approaching $1 million in respect of which he did not issue a tax invoice until 10 July 2013 and refused to produce his cost agreements - the latter part of which allegation, which is directed seemingly to Mr Stanton, appears to post-date the complained of failure to ascertain the terms of the costs agreement) ([81] and 82); and continued to press for personal costs orders against the plaintiffs in respect to the joinder of Mrs Costi in circumstances where it is alleged that Ms Blacker and Mr O'Connor "knew that there was no claim for wasted costs by reference to the joinder" (103(iii) and 109(iii)).

[18]

Mr Holmes

The allegations against Mr Holmes relate to his retainer as Counsel by the McLachlan Thorpe defendants to act on behalf of the De Costi Parties in connection with the Wachtenheim cross-claim.
The proposed amended statement of claim alleges conspiracy, fraud and breaches of duty as against all defendants, including Mr Holmes. Complaint is made that the proposed amended statement of claim does not identify a duty allegedly owed by Mr Holmes, and does not specifically plead facts that give rise to a duty or the scope and content of any duty. It is noted that the alleged basis of the entitlement to aggravated damages against Mr Holmes is pleaded at 156 (where (b) appears for the second time) at (b)(vi), and refers to the totality of the conduct by all of the defendants; that the alleged basis of an entitlement to exemplary damages is at 156(i)-(vii); and that the particulars make allegations against all defendants collectively of serious dishonesty, premeditation and the perversion of justice aimed at "causing serious irreversible damage" to the plaintiffs and Mrs Young.
The allegations as to the primary conspiracy (see [32]-[34] of the proposed amended statement of claim) have been extracted above. Paragraph 32 does not set out the acts that Mr Holmes is alleged to have committed in furtherance of the conspiracy. The allegations made against Mr Holmes are in effect that he acted on instructions to prosecute proceedings on behalf of his clients that culminated in the costs orders and the judgments that are sought to be set aside. In particular, Mr Holmes is included in allegations made against the De Costi Lawyers (at 58, [74], 76(i)-(iv), 78, [79], 103(i), [108], [134], [143], [149], [150] and [154] of the proposed amended statement of claim). For Mr Holmes it is submitted that the closest the proposed amended statement of claim comes to alleging a specific act against Mr Holmes is the contemplation of a strike out application (58(iv)), which was filed.
Complaint is made that what Mr Holmes is specifically alleged to have done or not done in furtherance of the conspiracy, or that is alleged to have amounted to fraud or misconduct, is not pleaded; and that no specific act or omission is identified.

[19]

De Costi defendants

The allegations made as to the De Costi Parties and De Costi Lawyers (that I together refer to as the De Costi defendants) encompass the primary conspiracy allegation referred to above and various of the additional conspiracies (and need not here be repeated).
There are, however, various allegations made against particular of the De Costi Parties that appear to be specific to those defendants.
At [76]-[79], for example, allegations are made as to conduct of Mr Costi and Mr Stanton as to a conversation outside court on an unidentified date in early October 2012 from which it appears to be alleged that there was a consensus (see 76) between those defendants to the effect that "...we … will make sure that Muriniti and Newell' [sic] insurers will refuse to insure them by the time that 'we' are finished with them and they won't get indemnity". It is alleged that the De Costi Defendants had a "fixed intention" to bring a costs application against the plaintiffs, which application contrived to cause the plaintiffs to be without professional indemnity insurance and thus unable to renew their practising certificates.
Complaint is made as to the fact that this alleged conversation has only now been raised "out of left field", years after the event; not having being reported (or referred to in the costs applications that proceeded after judgment was entered against the plaintiffs) or the subject of protest hitherto. I am informed by Mr Stanton (appearing for the De Costi defendants, including himself on the present application) that this conversation (if the claims ultimately go forward) will be vehemently denied. That may well be so. However, it would not be an answer to a strike-out application (were this to have proceeded as a strike-out application, which this was not) nor could I conclude that it was a basis for summary dismissal (since such applications require one to proceed as if the material facts alleged are able to be proved). Thus, the complaint as to this allegation founding or being part of a conspiracy presently takes the matter nowhere (other than to presage a factual dispute arising over what was allegedly said some nine or so years ago - which is of some relevance to the question of prejudice as a result of delay). (The pleading in its present form does appear in part to be embarrassing insofar as the reference is to an approach in Mr Muriniti's "personal space", the ambit of which is wholly unclear.)
At [81]ff of the proposed amended statement of claim, it is alleged that: 81) The de Costi Costs Application disclosed that Stanton claimed fees approaching $1 million in respect of which he did not issue a memorandum/tax invoice until 10 July 2013 in circumstances which conveyed that he was operating on the basis of a conditional costs agreement for the purposes of the Wachtenheim Cross-Claim Proceedings. The de Costi Parties did not support their costs application with any costs agreements notwithstanding that Stanton's fees are not recoverable without proof that the contingency has been triggered. Stanton continues at this time to refuse to produce his costs agreement ("Stanton Costs Agreement and the de Costi Parties refuse to state what are the terms on Stanton's Costs agreement notwithstanding that the recovery of those fees is dependent on those terms. 82) On becoming aware of the matters in paragraph 81 Muriniti and Newell took steps as follows: a) Muriniti asked Robert Finnigan ("Finningan") [sic] a solicitor in the employ of Yeldham to issue a notice to produce for Stanton's costs agreement which Finnigan refused on the basis that there was no utility in obtaining the costs agreement. b) Newell requested of the Gadens Lawyers that they ascertain the terms of Stanton's costs agreement which O'Connor conveyed would be done. In fact, the Gadens Lawyers did not take any steps to ascertain the terms of of Stanton's costs agreement and never reverted to Newell concerning that matter. c) Lawcover and Suncorp concealed the terms of Stanton's costs agreement because they did not want Muriniti and Newell to be on enquiry as to the purport of the agreement. 83) In the premises of paragraphs (81) and (82) and of the pattern of conduct pleaded in this statement of claim: a) Stanton exposed himself to fees of almost $1 Million by reason that he had special knowledge that the usual or expected risks of making a costs application against legal practitioners did not need to be considered; and in the premises, b) Stanton's Costs agreement was underpinned by an agreement by the de Costi Parties with Lawcover and Suncorp that those Defendants would facilitate the establishment of a costs liability in Muriniti and Newell in favour of the de Costi Parties.
Mr Stanton contends that the claim that the costs agreements concerning him have not been produced is false; it is said that they have been produced pursuant to a Notice to Produce and a subpoena; that they are currently in the Registry of the Sydney District Court; and that they have been inspected by Mr Newell and Mr Muriniti. (I cannot possibly comment on those matters as I have no evidence thereof.) Nevertheless, the complaint in emotive terms is that the allegation in [81] "is a clear example of the grossly disturbing manner in which these litigants are invoking the jurisdiction of this Court and seeking to pen pleadings that are perfidious in terms of the contents as to what they are seeking to ascribe to defendants when these documents have been produced well to the knowledge of Mr Newell and Mr Muriniti, and yet they persist in making these allegations". Presumably therefore this will also be the matter of hotly contested factual debate if the matter proceeds. I simply note this at this point because Mr Newell's submissions as to the costs reference suggest that a lot of time (and no doubt cost) has been expended on the plaintiffs seeking to satisfy themselves as to the precise terms of Mr Stanton's costs agreement(s).

[20]

Mr Doyle Gray

The allegations made against Mr Doyle Gray relate to his limited involvement as counsel for Mr Shnider in the De Costi proceedings, being instructed by Ms Searle in the cost application proceedings, including the plaintiffs' summary dismissal application fo the De Costi Costs Application after Taylor SC DCJ's judgment (in De Costi (No 4)); and then being instructed by Ms Searle as counsel for Ms Thomson on the Trustee Costs Motion.
Mr Doyle Gray points out that the Trustee Costs Motion was not the subject of the decisions in De Costi (No 6) or Newell v De Costi and that he did not appear at the hearings that led to those judgments. Mr Doyle Gray has had no involvement in the De Costi proceedings since 31 August 2014. It is noted that the ongoing costs reference before the District Court is unrelated to the Trustee Costs Motion or Mr Doyle Gray's involvement in the De Costi proceedings; and that Mr Doyle Gray also had no involvement in the Young v King proceedings or any of the associated satellite litigation.
It is noted that the plaintiffs' original statement of claim made no substantive allegations against Mr Doyle Gray, other than to plead a bare conclusion that he was "liable in conspiracy" (now at [157]). Mr Doyle Gray says that the outline of the operation of the conspiracy provided to his solicitors (in response to their repeated requests for advice as to what, if any, allegations the plaintiffs intended to make against Mr Doyle Gray) failed to disclose any reasonable cause of action against Mr Doyle Gray; and that it was only after the filing of his original submissions on the dismissal application that the plaintiffs served the proposed amended statement of claim which now makes a series of new allegations against him. Mr Doyle Gray says that there is nothing to suggest that these new allegations arise from any new information obtained by the plaintiffs in the intervening period. Rather, it is submitted that the plaintiffs' approach in these proceedings, when challenged on the untenable nature of their claims, is simply to make new ones (a complaint also made by Mr Lloyd SC). Mr Doyle Gray argues that this approach suggests the absence of any reasonable basis for the claims now sought to be advanced by the plaintiffs.
The central allegation advanced by the plaintiffs against Mr Doyle Gray (as with most but not all of the defendants) is that contained at [32] of the proposed statement of claim (which I have referred to above and about which Mr Doyle Gray makes the same or similar complaints as do the other defendants). The proposed amended statement of claim goes on to make a limited number of allegations which refer to Mr Doyle Gray.
First, at [90], that Mr Doyle Gray prepared the Trustee Costs Motion, which was filed on 14 October 2013. It is noted that this is the only conduct Mr Doyle Gray is said to have undertaken in furtherance of the alleged conspiracy; and that this was more than two years after he is alleged to have joined the conspiracy in mid-2011 ([32]). At [93] it is alleged that the notice of motion was brought on the basis of an agreement or understanding that the plaintiffs' insurers would settle the application "and/or hold [Ms Thomson, Ms Searle and Mr Doyle Gray] harmless from effecting an abuse of process". (It is not clear whether it is asserted that Mr Doyle Gray was a party to that agreement or understanding but such an allegation is arguably implicit in the pleading.)
At 95, the plaintiffs further allege that the Trustee Costs Motion was brought on the foundation of an agreement between Ms Searle, Mr Doyle Gray and Mr Shnider that Mr Shnider would procure Mr Wachtenheim to give false evidence against the plaintiffs; and it is alleged that the Trustee Costs Motion would not have been brought but for this agreement.
At [152], the plaintiffs repeat the allegation that the Trustee Costs Motion was brought based on the alleged agreement that plaintiffs' insurers would hold harmless Mr Doyle Gray in respect of the motion, and further allege that the agreement involved facilitating a "costs liability" against the plaintiffs for the purpose of "adversely affected the security of the [their] professional indemnity insurance".
Finally, it is alleged that Mr Doyle Gray knew that the ultimate object of the agreement was to "adversely impact the conduct of a current Court case or Court cases in which the Plaintiffs were involved" and which were "of particular concern" to their insurers, and "by implication involved to pervert [sic] the course of justice". (It is noted that no particulars are provided of the alleged agreement or Mr Doyle Gray's knowledge of its alleged aim.)

[21]

Mr Lloyd SC

As to the allegations made against Mr Lloyd SC, they arise out of his retainer (then as junior counsel) to appear for Mr Muriniti (on the instructions of Mr Yeldham and Ms Vitalone) on the hearing ot the personal costs applications against him in the De Costi proceedings and appeal therefrom (in which, as noted in the chronology set out earlier, Mr Muriniti enjoyed a measure of success, defeating all bar one of the s 348 claims and obtaining an ultimate outcome under which Mr Muriniti's liability was found to be less than half of that claimed by the De Costi Parties).
As with various of the other defendants, it is noted that there are relatively few references to Mr Lloyd SC in the proposed amended statement of claim (indeed he was not initially even alleged to be part of the conspiracy); that all of the paragraphs of the original statement of claim which made claims against Mr Lloyd SC have been removed; and that the proposed amended statement of claim now contains new and different references to Mr Lloyd SC. (As others have suggested it is said that the plaintiffs' approach appears to be one under which, if one story advanced cannot be maintained, it can simply be replaced by another.)
The relevant allegations now made against Mr Lloyd SC in the proposed amended statement of claim commence with the primary alleged conspiracy to which others are said to have been a party "in or about no later than 2011/12" (which predates Mr Lloyd's involvement in the De Costi costs proceedings) and which he (and his instructing solicitors) are said to have "joined" "no later than" May 2013 (see at 32).
Complaint is made that there is no explanation as to how Mr Lloyd SC "joined" the conspiracy (whatever that may mean, precisely), and no real identification as to when he "joined" it. It is said that these basic deficiencies, combined with: the fact that Mr Lloyd SC had not even been alleged to be a party to the conspiracy when the claim was first pleaded; the absence of any basis for the new allegation; and the patent absurdy of his involvement in such a conspiracy; demonstrate that the allegations are being made up by the plaintiffs "as they go along".
At 130 of the proposed amended statement of claim it is alleged that Mr Lloyd SC attended a conference and gave advice to Mr Muriniti not to give evidence at the hearing of the personal costs applications. (It is noted that nothing appears to turn on this allegation. In this regard, I note that while the plaintiffs' submissions place emphasis on the advice given by Mr Watson SC to Mr Newell to like effect they do not refer to Mr Lloyd's advice to Mr Muriniti.)
In various other paragraphs of the proposed amended statement of claim, Mr Lloyd SC (who falls within the plaintiffs' defined term of Lawcover Lawyers) is alleged to have either "maintained" the conspiracy, or have been part of a "collusive agreement", and done various things.
First, at [108] of the proposed amended statement of claim, Mr Lloyd SC is alleged to having maintained the conspiracy "from March 2015", done so "by colluding to achieve a basis for a costs liability by perpetuating and inflating or overstating [the personal costs applications] without regard to their merits" and thereby was "perverting the course of justice".
Second, at 147 and (d) of the proposed amended statement of claim, Mr Lloyd SC is alleged to have affirmed to the court during a hearing of the personal costs application in March 2016 that no challenge was being made to a finding of fact made by the court at an earlier point in the proceedings, and to have "evaded" an allegation that was being made against Mr Muriniti by mis-describing it. This alleged conduct (along with the conduct of others) is alleged in [149] to have resulted in the Court then making findings adverse to the plaintiffs, which is said to be the product of a "collusive agreement" between various parties (including Mr Lloyd SC) so inadequately to defend the personal costs applications in order to facilitate the personal costs order against the plaintiffs (the parties for whom Mr Lloyd SC appeared).
Third, at 154 and (c)(v) it is alleged that, during the hearing of the personal costs applications in March 2016, Mr Lloyd SC (and others) omitted to correct submissions that had been made to the Court by other persons about various matters, and thereby "the conspiracy was advanced".

[23]

Particular complaints as to pleaded claims

As a general matter, there was much complaint as to pleading deficiencies with the proposed amended statement of claim, including the making of rolled up allegations and the terminology adopted (which in a number of instances was unclear or which amounted to an embarrassing pleading - such as the reference to "infirmities" in documents or matters being "problematic"). I would add to that that allegations such as Ms Baxter catching Mr Yeldham's eye with a "look of alarm" or the approach which was said to be in Mr Muriniti's "personal space". More serious in my view are the complaints (by the Lawcover and Suncorp defendants) as to the making of assertions in relation to the corporate entities of having a purpose or intention without identification of the individual or individuals within those entities holding such a purpose or intention and a pleading of the facts and circumstances relied upon for attribution of that person's or persons' knowledge or purpose or intention to the corporation.
So, for example, the Suncorp defendants identify as a considerable difficulty with the proposed amended statement of claim the fact that the pleading makes various assertions as to Suncorp doing things such as "combining" and "instructing", and to Suncorp having a "purpose" or an "intention" (as indeed the proposed amended statement of claim does in relation to the Lawcover defendants) but does not identify any individual within Suncorp (or Lawcover) whose conduct or state of mind would be attributable (by reference to principles of agency or company law) to the corporation.
The central complaint (by all the defendants), however, is that the plaintiffs have failed properly to plead an "agreement" (the essential element, principal foundation, or "gist" of the tort of conspiracy - see Ahern v The Queen (1988) 165 CLR 87; [1988] HCA 39 (Ahern) at 96), or the material facts on which they say that the inference should be drawn that there was such an agreement, to injure the plaintiffs.
It is noted that in City of the Gold Coast v Pioneer Concrete (QLD) Pty Ltd (1998) 99 LGERA 263; [1999] FCA 499, Drummond J held at 278 that it is an essential element (of a conspiracy by unlawful means) "that the agreement to commit the unlawful act be made with an intention to injure the plaintiff". Thus it is said that in order properly to plead the "agreement" element, it is necessary not only that a plaintiff plead overt facts which evidence not only an agreement to commit an unlawful act, but an agreement made with an intention to injure the plaintiff (albeit that, for the tort of conspiracy by unlawful means, that intention need not be the predominant intention for combining).
It is noted that the proposed amended statement of claim contains no express pleading of any agreement having been entered between the twenty-three defendants (i.e., there is no pleading that all of the twenty-three defendants attended a meeting or some other like event at which time they all agreed, or combined together, with the requisite intention (or, in respect of those said later to have joined the conspiracy, any agreement to do so or, indeed, of the facts and circumstances that would establish or found the inference of knowledge of such a conspiracy)).
So, for example, in relation to the allegation one or more defendants "joined" the conspiracy at a later time (see for example, at 32; 105 and [144] of the proposed amended statement of claim), while the defendants accept that a conspirator may "join in the execution" of a plan after it has been originally conceived and still be liable in conspiracy (Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc [1990] 1 QB 391 at 405 (Slade LJ)), it is said that, in order to "join" the conspiracy, a person must first learn or discover it; i.e., that a person cannot join a conspiracy of which he or she is not aware. Thus, the defendants say (and I agree) that it is necessary that the pleading allege the material facts upon which the requisite knowledge (and intention) is alleged or from which it is to be inferred.
Complaint is made that the proposed amended statement of claim makes various global allegations against groups of defendants being imprecise as to the particular involvement of individual defendants. So, for example, Mr Andrew points to the following as being "bundled allegations" in the proposed amended statement of claim: 27, which groups Mr Andrew together with Ms Blacker and Mr O'Connor are the "New Suncorp Lawyers" (although until on or about 1 January 2016, Mr Andrew practised at a different firm to Ms Blacker and Mr O'Connor; and Mr Andrew did not have (and is not alleged to have had) any involvement in the De Costi litigation or the costs applications made against the plaintiffs); [126], [139] and [141], which make allegations against the "Suncorp Lawyers" (a term not defined in [27] of the proposed amended statement of claim); [146], which makes an allegation as to the "New Suncorp Lawyers", without specifying precisely who took what steps; and 154(v), which again refers to the omission of the "Suncorp Lawyers" to correct false representations.

[27]

Paragraphs [32]-[34]: the alleged conspiracy

There is unanimous complaint as to the pleading of the primary alleged conspiracy.
The Lawcover/YPOL defendants say that these paragraphs (which are central to later allegations) are deficient in that: first, the allegations are unsupported by any pleaded material facts; second, to the extent that they amount to allegations of fraud against a corporate entity (Lawcover) they do so without addressing the requirements for attributing fraud to a corporate body (the complaint also made by the Suncorp defendants as noted above); and, third, that the allegation that some 19 separate defendants conspired with the ultimate aim of perverting the course of justice and preventing the plaintiffs from representing Mrs Young in wholly unrelated proceedings is inexplicable.
As to the first complaint, it is noted that no attempt has been made to identify: the nature and effect of the conspiracy agreement; how the plaintiffs were injured or "defrauded" and by whom; how it was that the defendants "conspired and combined together"; or how it was that the fifteenth to twentieth defendants joined the conspiracy "by no later than" May 2013 or what occurred in May 2013 which made the stated defendants aware of the conspiracy. It is said that (contrary to the requirements of r 15.3 of the UCPR) no particulars of the alleged "fraud" have been provided.
Insofar as the plaintiffs contend that the agreement is to be inferred by reading [32] together with the "unlawful acts" which are pleaded in the paragraphs which follow it (i.e., [35] to 156), as adverted to above, the defendants accept that in cases based on clandestine arrangements a plaintiff will be unable to plead the terms of an express agreement but they maintain that, for an agreement to be inferred from other facts, it is necessary for a plaintiff to plead and particularise the overt acts it intends to rely on to justify the inference that the agreement on which it relies was in fact made (and that this has not here been done). It is noted that in Bullen, Edward, Sir William Blair, Lord Daniel Brennan, Sir Robin Jacob and Sir Brian Langstaff, Bullen & Leake & Jacob's Precedents of Pleadings (19th ed, 2019, Sweet & Maxwell), the authors state that in order for an agreement to be inferred, a plaintiff "must both plead the primary facts on which he relies and set out clearly how they give rise to the inference that the defendants were parties to the conspiracy", i.e., that the "unlawful acts" undertaken in pursuance of the alleged conspiracy must be specifically pleaded, and the inference of fact, or the link from "act" to the "agreement", should be plainly stated. Reference is made to my observation in Weston v Publishing and Broadcasting Ltd (2011) 83 ACSR 206; [2011] NSWSC 433 (Weston v PBL) to the effect that Ahern does not suggest that it is not necessary to plead, with particularity, each of the facts on which the plaintiff relies for the allegation of conspiracy and from which the Court will be asked to draw that inference.
Thus it is said that the plaintiffs have not pleaded the necessary overt facts in the proposed amended statement of claim from which an agreement between the twenty-three defendants can be inferred. For example, the proposed amended statement of claim does not set out how the alleged "unlawful acts" pleaded (being those at [35]-156) connect logically to the substantive allegation that the defendants were acting together to injure the plaintiffs (noting that there is no material fact alleged of which the defendants are alleged to have become aware of and then agreed to join the alleged conspiracy).
As to the second complaint made by the Lawcover/YPOL defendants, reference is made to the observation by Beech-Jones J (as his Honour then was) in Williamson v Elders Limited [2017] NSWSC 667 that the requirements for attributing fraud in respect of a corporate body are not straightforward (his Honour referring to Krakowski v Eurolynx Properties Limited (1995) 183 CLR 563; [1995] HCA 68, where Brennan, Deane, Gaudron and McHugh JJ at 582-583 approved a statement by Bright J in Brambles Holdings Limited v Carey (1976) 15 SASR 270 at 279 (Brambles) to the effect that it is "necessary to specify some person or persons so closely and relevantly connected with the company that the state of mind of that person or those persons, can be treated as being identified with the company so that their state of mind can be treated as being the state of mind of the company".
As to their third complaint, it is noted that the 19 defendants the subject of this allegation are those involved in the De Costi proceedings (including two De Costi companies, individuals, witnesses, solicitors and barristers; the Lawcover defendants, the YPOL defendants and others). Complaint is made that the references to "known facts" and "claimable basis" in ([33]) and to "adverse underwriting consequences" ([33(b)]) are not defined, explained or particularised. Insofar as the reference to a "claimable basis" is directed to a claim made against Mr Muriniti to which his professional indemnity insurance would respond and the allegation refers to an increase in the amount of Mr Muriniti's premiums payable to Lawcover for professional indemnity insurance by reason of a claim having been made against him, the Lawcover/YPOL defendants say that there is a simple explanation for why Mr Muriniti stopped acting for Mrs Young and that it has nothing to do with his insurance arrangements (namely, that it was her bankruptcy, after some nine years of advice and representation by the plaintiffs, that finally brought the retainer to an end).
Similarly, the Suncorp defendants take issue with this paragraph as to what is meant by Suncorp having a "claimable basis" to decline to renew Mr Newell's professional indemnity insurance. The Suncorp defendants say that it is not apparent why, in 2011, Suncorp would wish to decline to renew Mr Newell's professional indemnity insurance (and note that it in fact did renew his policy for the 2011/12, 2012/13 and 2013/14 policy years). Suncorp further says that there is no obligation upon a general insurer to renew a policy of liability insurance, and that a general insurer is entitled to do so without reasons, and without giving reasons. It is said that Suncorp did not need to create a "basis", "claimable" or otherwise, for declining to renew the insurance.
As to the allegations in [33] and [34], it is said that: they are devoid of material facts and wholly unparticularised (and inherently incredible and nonsensical); they proceed on the irrational basis that an insurer engaged in a fraudulent conspiracy to promote claims against itself (whereas the rational and logical starting point would be that a professional insurer seeks to avoid and minimise, rather than actively promote, the making of claims for which the insurer may ultimately be liable); that no interest of Lawcover and Ms Baxter would be served by achieving the "ultimate purpose" of preventing or inhibiting the plaintiffs (including Mr Newell, who was not in 2011 or 2012 a Lawcover insured) from acting for Mrs Young, either in proceedings before the Land and Environment Court or this Court; that the extension of the allegations of serious criminal conduct to Ms Baxter, who could have no personal interest in these matters (nor is any such interest alleged), is obscure; and that if the "ultimate purpose" of the "conspiracy" was directed to preventing Mrs Young's access to the Courts (by preventing or intimidating the plaintiffs from acting for Mrs Young), it would be Mrs Young or the trustee of her bankrupt estate who would apparently be the proper plaintiff. It is said that Mrs Young's extensive litigation only ceased when she was bankrupted and that this had nothing to do with the plaintiffs' professional indemnity insurance.
Complaint is also made as to the vagueness of the plaintiffs' assertion that it is "the pattern of conduct pleaded in this statement of claim" from which the existence of the "alleged conspiracy and combination" of the named defendants in these paragraphs (commencing in 2011, and with others "joining" the conspiracy no later than May 2013) is drawn.
Similarly, complaint is made that specific allegations as made against the defendants are also generally characterised by a lack of particularisation. By way of example, it is noted that: the allegation at 35 merely asserts, without any particularisation or examples, that named defendants made "deliberate and systematic breaches" of s 56 of the Civil Procedure Act (without particulars of the alleged deliberate breaches) and that the allegation at 74 merely asserts that Mr Thorpe and Ms Ng "colluded" with Steven Vial (with no particulars of the said collusion; i.e., when or where it occurred, or the subject matter of the "collusion" are provided).
Complaint is made as to the generality of the reliance upon "the pattern of conduct pleaded" particularly in relation to defendants not alleged to be involved in all of the conduct pleaded in the proposed amended statement of claim (for example, Mr Doyle Gray, Mr Lloyd SC, Mr Watson SC and Mr Andrew).

[28]

Paragraph [35]: the overarching conspiracy allegations

Complaint is made that [35] of the proposed amended statement of claim is advanced as a summary or general plea (as to the alleged means employed to advance the conspiracy) which it is alleged involved unlawful means including the matters at (a), (b), (d) and (e), not all of which are developed further in the proposed amended statement of claim.
Complaint is made that [35] is vague and embarrassing in that: the chapeau, by its use of the word "including", does not exhaustively identify the "means employed to advance the conspiracy" and leaves the defendants to speculate as to the nature and extent of the "unlawful means" relied upon; 35 fails to identify the nature of the alleged "systematic collusion" and fails to identify when and how the "systematic collusion" commenced and was carried out or the subject matter of the alleged collusion; 35 fails to identify how or why the 23 defendants held the alleged "overarching purpose" for securing a costs liability against the plaintiffs, and, together with 35, alleges that the defendants have engaged in criminal conduct, namely breaches of s 319 of the Crimes Act (it being submitted that such allegations are unnecessary for the purposes of alleging the elements of the cause of action sought to be sued upon, and are scandalous in the extreme); 35 fails to identify the conduct said to amount to "deliberate breaches of statutory and contractual duties of good faith"; finally, that 35 fails to plead the content of the fiduciary duty said to have been breached (the nature or extent of the duty, how it arose or how it was allegedly breached), what is meant, precisely, by the expression "effecting or causing to be effected" or the contents of the "professional obligations" said to have been breached. The Lawcover/YPOL defendants point out that the alleged breaches of fiduciary and professional obligations are not addressed elsewhere in the proposed amended statement of claim.
It is said that [35] of the proposed amended statement of claim fails to meet the minimum requirements for a proper pleading of a claim of conspiracy (see below); and that, insofar as 35 seeks to allege a breach of fiduciary duty, the pleading fails to reach the requisite pleading threshold. Reference is made to the observation that it is not sufficient "simply to allege that a fiduciary relationship has arisen; plead the content of the fiduciary duties in the most general of terms … ; not plead any breach of the fiduciary duties; and then seek a declaration of breach of fiduciary duty by reference to a range of paragraphs in the pleading the relevance of which to any allegation of breach of a recognised fiduciary obligation is not made clear" (see Jacobsen v Jacobsen [2017] NSWSC 1590 at [99]).

[29]

Paragraphs [36]-[57]: Young v King and Young v Hones litigation

These paragraphs of the proposed amended statement of claim broadly address matters related to the conduct of the Young v King and Young v Hones litigation between around 2004 and 2011. As to this part of the proposed amended statement of claim, a number of complaints are made.
First, that the allegations at [41] and [42] suggest that a conspiracy is sought to be advanced against non-parties to these proceedings without those parties being joined and without the allegations being made squarely. (I accept the force of this criticism in that the pleading contemplates findings being sought as to conduct of parties not in a position to defend themselves, though I note that, as adverted to above, Mr Newell apparently contemplates that these parties or some of them will be joined to the anticipated separate proceedings if the assignment from Mrs Young's trustee in bankruptcy - which he suggests is intended to assist Mrs Young to preserve her house - is ever completed.)
Second, that at [45]-[46], Lawcover is alleged to have "caused" the filing of a defence (without alleging how), which defence was "problematic" (at 46). Complaint is made that an allegation in a pleading that another pleading is "problematic" is imprecise, evasive and ambiguous. I agree. It is an embarrassing pleading. Further, as to the allegation at [46], the Suncorp defendants say that what is pleaded suggests nothing more than that there were contestable facts that would have to be determined in the negligence proceedings. In any event, they complain that the relevance of this allegation to the present proceeding is unclear.
Third, at [51], there is reference to an unidentified, unexplained and unparticularised "related District Court case"; and at [52] and [53], as to an order made requiring the filing of evidence in the Young litigation referred to as the "negligence proceeding". It is alleged at [54] that Lawcover and Suncorp, through their representatives, attended the District Court (on an occasion when the related District Court case was before the Court) "in the hope of finding" that Mrs Young "would find herself without lawyers" and the need to file "Explanatory Evidence" would dissolve. Complaint is made that the allegation at [54] (which is said to be in the premises of [52] and [53]) does not follow from the preceding paragraphs; and that it is just one example of a number of allegations in the pleading that are non-sequiturs. It is noted that the proposed amended statement of claim does not return to this allegation; and it is said that its relevance to the alleged cause of action is obscure.
I note that in oral submissions, Mr Newell explained the allegations at [52]-[54] as, in effect, as being that there was no reason for this group of people to have attended the District Court on that occasion (albeit that the principle of open justice would permit any one or more of them to have done so) and hence a sinister purpose should be ascribed to their attendance. The theory seems to be that there was an expectation that if there was continuing default in the related court case then this might lead to Mrs Young's lawyers being unable to cease to act for her (which logically does not follow) and hence there would be some flow on effect in the negligence proceedings such that the need for the filing of evidence in the separate negligence proceedings would be obviated. The reasoning behind this allegation is tortuous to say the least.
The Suncorp defendants say that, even accepting at face value the accuracy of the facts pleaded in the proposed amended statement of claim, this is an example of allegations in the pleading where the inferences that the plaintiffs seek to have drawn from the alleged facts are fanciful (noting the high evidentiary burden the plaintiffs face having regard to the seriousness of the allegations of misconduct that are advanced against the defendants). Other such examples to which the Suncorp defendants point are the allegations at [56], [62], 66; and 74(ix)(c) (see below).

[31]

Paragraphs [58]-[73]: pre-De Costi proceedings

These paragraphs of the proposed amended statement of claim address events in the lead-up to the trial of the De Costi proceedings; there being an allegation that the "February Motion" brought by the De Costi Parties (see above) was brought for a collateral purpose, namely to create a conflict as between the plaintiffs and their client, Mr Wachtenheim.
Insofar as the Lawcover defendants are concerned, it is said that the nub of the allegations against them is at 72, where the plaintiffs allege: the existence of an agreement between the De Costi Parties, Mr Shnider, Lawcover and Suncorp by which Lawcover and Suncorp would not expose certain allegedly false affidavits; the alleged complicity of the De Costi Parties bringing a motion based on false evidence; and that Lawcover and Suncorp would exert control, as the plaintiffs' insurers, to bring about a costs liability in the plaintiffs.
Complaint is made by the Lawcover defendants (and a corresponding complaint is made by the Suncorp defendants and others) that: no material facts are pleaded in support of the alleged "agreement" (as to when, by whom and how the alleged agreement was effected); there is no allegation of facts or facts from which any inference as to the existence of any such agreement could rationally be drawn; and no particulars are supplied of the alleged "agreement". It is said that (although the proposed amended statement of claim does not specifically allege it) insofar as the "agreement" contended for is an inferred agreement such contracts are not to be lightly implied. Further, the defendants point to significant timing difficulties with the allegations because, on the plaintiffs' own case, neither Lawcover nor Suncorp had any "control" of the "February Costs Applications" at the time.
It is noted, for example, that Suncorp was first notified of the February Motion in June 2012, by which time the motion had already been abandoned (and hence the Suncorp defendants say that the allegation is fanciful). Again, it is said that the allegation starts from the premise that an insurer would take steps to promote the making and establishment of claims against its own insured, which the insurer would then have to meet.

[33]

Paragraphs [74]-[83]: De Costi litigation and judgment

These paragraphs of the proposed amended statement of claim address the period from the trial of the De Costi proceedings in 2012 to the delivery of judgment in 2013. It is noted that, in substance, the allegations made against the De Costi Parties and their lawyers appear to be focused on a strategy (see at 75(I)) to drive a wedge between the plaintiffs and Mr Wachtenheim; but that the allegations at [76] and [83] involve Lawcover.
The Suncorp defendants say that the allegation at 74(ix)(c) (that the De Costi Lawyers had agreed with a witness to participate in an ambush of Mr Muriniti by remaining silent about alleged concerns the witness had relating to an affidavit he had earlier sworn) is another instance of a fanciful allegation, in circumstances where it is noted that Mr Muriniti was in fact already on notice of those concerns having been served with a draft affidavit (see 66).
At [76], it is alleged that "in the premises" of comments alleged to have been made by Mr Costi and Mr Stanton to Mr Muriniti (see [79]), the De Costi Parties "had reached an understanding with [Lawcover] and [Suncorp] that the consequence" of the De Costi Parties "bringing their claim would be a non-renewal of the insurance of at least one of [the Plaintiffs] irrespective of the merits of the claim". The Lawcover/YPOL defendants complain that this alleged "understanding" is unsupported by any pleaded material facts; devoid of particulars; and is a further example of a non-sequitur. It is said that the suggestion that a practitioner's insurance standing may be adversely affected by a claim is common sense; and that it does not follow that a person making such a suggestion has "reached an understanding" with the insurer. Similar submissions are made in relation to [83] of the proposed amended statement of claim.
The Suncorp defendants similarly say that, insofar as an attempt is made to implicate Suncorp in the alleged encounter between Mr Muriniti, Mr Costi and Mr Stanton (see as alleged at [76] of the proposed amended statement of claim), in which Mr Stanton is said to have indicated that the De Costi Parties would ensure that the plaintiffs' insurer would refuse to insure them, the process of reasoning from that statement to a conclusion that the De Costi Parties had therefore "reached an understanding" with Suncorp that, if the De Costi Parties made the foreshadowed costs application, then Suncorp would not renew Mr Newell's insurance irrespective of the merits of the costs application, is specious and irrational.

[36]

Paragraphs [90]-[96] and [103]-[107]: the "Trustee Costs Claim"

These paragraphs make allegations concerning a Notice of Motion filed for Ms Thomson in the De Costi proceedings in which various costs orders were sought, including as against the plaintiffs. At [92], the plaintiffs contend that the "Trustee Costs Claim" was "misguided" and exhibited "infirmities". (The reference to "infirmities" is to my mind on a par with the allegation that a pleading was "problematic". It is a perjorative term that is vague and ambiguous; and an embarrassing pleading.)
Mr Doyle Gray says that this allegation at [92] is central to the plaintiffs' claim against him but that none of the alleged "infirmities" of the costs motion pleaded in [92] provides any foundation for the subsequent allegation made at [93].
At [93], it is alleged that the Trustee Costs Claim had no reasonable prospects of success and that, "in the premises", there was an "agreement or understanding" that Lawcover and Suncorp would "use their endeavours to afford a settlement" for Ms Thomson "and/or hold [Ms Thomson, Ms Searle and Mr Doyle Gray] harmless from effecting an abuse of process".
Complaint is again made that no material facts are pleaded or particulars provided as to how this agreement is said to have arisen; and that this is no more than a bare assertion. Moreover, it is said that the existence of such an agreement is inconsistent with the facts that: the Trustee Costs Motion was subsequently defended by the plaintiffs' insurers; the motion was dismissed (in part) by the Court ([103]); and costs orders were ultimately made against Ms Thomson in respect of the motion ([107]).
As to the allegation at [95], Mr Doyle Gray argues that the circumstances alleged at 95-(e) provide no basis to infer the existence of an agreement (for false evidence to be procured) and say that the allegations are largely baseless assertions and speculation (noting that it is not even alleged that Mr Wachtenheim in fact gave any false evidence in accordance with the supposed agreement).
The Lawcover/YPOL defendants say that the complaint against them seems to be that the Lawcover defendants should have sought an order for the plaintiffs' costs of the Trustee Costs Claim on an indemnity basis, which they declined to do (see at [105]). They contend that this allegation could only be made good if several (more plausible) explanations in accordance with ordinary experience are excluded, namely, that: the Trustee Costs Claim was brought on the basis that the practitioners with carriage of it considered that it was properly made and had reasonable prospects; and that there are likely sound commercial reasons not to pursue an order for indemnity, as opposed to ordinary, costs.
The Suncorp defendants further complain that what steps it is alleged ought to have been taken are not articulated; and that even assuming such a "customary practice" as alleged at [94] existed, the steps not taken by Suncorp could not possibly enable an inference to be drawn that there was some conspiratorial agreement with Ms Thomson.

[40]

Paragraphs [108]-[130]: the basis of the personal costs orders in De Costi

These paragraphs of the proposed amended statement of claim relate to the findings of Taylor SC DCJ in the course of the personal costs order judgment, the conduct of the application which led to that judgment, and contentions as to the conduct of the defendants in that litigation.
The Lawcover/YPOL defendants say that the material allegations against them here appear to be that: the YPOL defendants knew of various matters said to negative the heads of complaint made by the De Costi Parties in support of their application for personal costs orders against the Plaintiffs (see at [126]), this allegation of knowledge being allegedly based on the allegations at [117]-[125] (but which, the Lawcover/YPOL defendants say, is a further non-sequitur); the De Costi Parties' submissions made in support of their application for personal costs orders against the plaintiffs were advanced "in the knowledge or expectation that no reasonable steps would be taken by [Lawcover] and [Suncorp] to defend the allegations" (see at [126]); and that Mr Yeldham gave certain advice (which Mr Muriniti criticises), which is said to demonstrate Mr Yeldham's intention to promote the legitimacy of certain heads advanced by the De Costi Parties and to conceal an allegation from Mr Muriniti.
Apart from the complaint that the words in the allegation at [127] (namely, "in the premises continued to hold the intention pleaded at paragraph 51(b)") contain an incorrect cross-reference (and as such the allegation is obscure), the Lawcover/YPOL defendants say the following.
Complaint is made that the use of the unexplained term "reasonable steps" seems to equate not taking every last allegedly available point in litigation to dereliction or breach of duty, which it is said must be rejected. Further, the Lawcover/YPOL defendants repeat their submissions as to the criticism of Mr Yeldham's advice.
Insofar as aspects of these allegations (in particular, [108]) apparently relate to the ongoing wasted costs reference being conducted in the District Court and whether or not there will ultimately be found to be any wasted costs in relation to the "Androulla Claim", the Lawcover/YPOL defendants say that there is an inconsistency between Mr Muriniti's affidavit sworn 9 April 2021 and the allegations at [108]-[109] of the proposed amended statement of claim. In the affidavit to which reference is here made, Mr Muriniti deposed that: 9 … the costs needed to be assessed with accuracy because the actual costs properly recoverable as a result of the residual matters was expected to determine whether the costs application had any proper foundation and by implication whether it had been kept alive for a collateral purpose by the insurers and the De Costi parties. […] 12 Submissions were made that the importance of the reference was that it was important that the costs be accurately assessed. We believed that any settlement imposed upon us by Lawcover and Suncorp which was not based on a proper and particular assessment of the costs attributable to the residual matters would have the effect of destroying critical evidence to support the intended Equity Division proceedings: being the proceedings presently before this Honourable Court.
What is alleged at [108]-[109] is that: 108) From and after March 2015, the de Costi Lawyers on the instructions and with the authority of the de Costi Parties and the Lawcover Lawyers on the instructions of the Lawcovers Parties, the Gadens Lawyers and Watson maintained the conspiracy by colluding to achieve a basis for a costs liability by perpetuating and inflating or overstating the Residual Claims without regard to their merits which conduct in the premises amounted to a perverting of the course of justice. 109) The circumstances of the Androulla Section 345 Claim were as follows: a) So far as concerned the Section 349 Finding Taylor DCJ erred in finding that the facts established by the evidence at trial did not give rise to a fairly arguable case for damages against Androulla Costi for unconscionable conduct in that: i. Taylor DCJ erred in that contrary to his conclusion at [169] in the June 2014 Judgment there was in no finding in the 3 May Judgment that the lease urged upon Wachtenheim by Androulla Costi was not a lease with a 12 month demolition clause. ii. Further, the reasoning based on what was found in the 3 May Judgment exploited the wrong test in that the true question is whether the facts established by the evidence at trial provided a reasonable basis to believe that Androulla Costi had engaged in unconscionable conduct in taking advantage of the fact that the burden of a lease with a demolition clause devolved to Wachtenheim. iii. Androulla Costi did know that the lease urged upon Wachtenheim was a lease with a 12 month demolition clause as she signed the variation of lease with the 12 month demolition clause prior to the assignment of the lease to Wachtenheim. iv. Taylor DCJ misapprehended the evidence for the purposes of the demolition clause allegation in dismissing the relevance of the pleading that Androulla Costi signed leases on behalf of De Costi Holdings and De Costi Franchises and of the pleading that Wachtenheim was reliant upon Shnider in that: 1. The pleading that Androulla Costi signed leases on behalf of De Costi Holdings and De Costi Franchises established that she knew that the lease as varied with the demolition clause was the lease that Wachtenheim would be acquiring. 2. The pleading that Wachtenheim was reliant upon Shnider militated against Wachtenheim receiving adequate independent advice concerning the demolition clause in that his legal advice was filtered through Shnider. b) Taylor DCJ erred in impliedly finding that the facts established by the evidence at trial did not form a reasonable basis for a claim that Androulla Costi knew of Wachtenheim's inability to meet his obligations upon entering into the Franchise Agreement in that the facts so established included that: (a) Androulla Costi had the day to day management of the franchise system (b) The evidence of Con Costi and Theodore was that they conducted the Dee Why business as franchisees. (c) The evidence that Franchise Point recruited franchisees and reported to Androulla Costi concerning the circumstances including the financial circumstances of the prospective franchisees. (d) Michael Anthony of Franchise Point assisted Wachtenheim in fully completing an application form to be considered as a franchisee which form required detailed disclosures of Wachtenheim's assets and liabilities and general financial circumstances. (e) At the material time, Wachtenheim had a mortgage over his residential home in the sum of $423,000. (f) The evidence was that the set-up costs of a franchise business were in the vicinity of $400,000 to $500,000. In order to recoup their then recent investment, Con and Theodore needed to sell the business for somewhere between $400,000 and $500,000. In the premises, Androulla Costi had every reason to understand that the Dee Why business was being sold to Wachtenheim for a sum in that range. (g) Androulla Costi's co-director George Costi was specifically told that Wachtenheim's total borrowings concomitant with the purchase of the DeeWhy business were in excess of $900,000 in that the sale price of the business was $440,000. (h) Con Costi (the son of Androulla Costi) and Theodore (her brother) both knew the purchase price in the premises of which it is implausible that Androulla Costi did not know the purchase price of the Dee Why business to be paid by Wachtenheim. (i) The evidence was that the Dee Why business had incurred a loss of $20,091.00 in the financial year 2003-2004 (shortly prior to inception of negotiations by Wachtenheim to purchase the business). (j) Wachtenheim in order to work long hours in the business could not after purchase of the Dee Why business pursue any economic activity by which he had previously paid his domestic home loan. (k) Androulla Costi gave evidence at trial that she knew how much product each franchisee was buying including Theodore and Con Costi, knew what the turnover of franchisees was, and had no difficulty knowing what the franchisees' profits were (transcript 30 August 2012 page 4127). c) So far as concerned the question whether there were any significant wasted costs by reason of the joinder of Androulla Costi the circumstances were as follows: i. Androulla Costi only swore two affidavits for the purposes of the Wachtenheim Cross-Claim ("the Cross-Claim Affidavits") (another two affidavits being for the purposes of the Supply Claim). ii. In the Cross-Claim Affidavits there was only one paragraph consisting of a single sentence which concerned the issues raised by the claim against Androulla Costi. The single sentence denied that Androulla Costi had pressed Wachtenheim to take over the lease for the Dee Why shop in his own name. iii. The forgoing matters were known to the de Costi Parties, the de Costi Lawyers, the Lawcover Lawyers, the New Suncorp Lawyers and Watson as they were readily ascertainable on the face of the Cross-Claim Affidavits.
The material inconsistency identified between the allegations in [108]-[109] of the proposed amended statement of claim, concerning the "Androulla Claim" and Mr Muriniti's contention that the determination of "the actual costs properly recoverable as a result of the residual matters was expected to determine whether the costs application had any proper foundation" is that the allegations at [108]-[109] are premised on there being either no or only negligible costs; whereas it is said that Mr Muriniti's affidavit makes clear that the required premise has not been satisfied and may never be satisfied. Reference is also made to the letter with which the initial statement of claim was served, in which Mr Muriniti wrote that the result and evidence produced by the costs referral process "will be central to case as it is intended to be pleaded".
The Lawcover/YPOL defendants say that, therefore, according to Mr Muriniti, the amount of any relevant wasted costs remains an open and unresolved question that will only be known when the District Court De Costi costs reference is complete. They say that it is extraordinary that allegations of fraud and conspiracy are made, and relied upon, in circumstances where the factual premise for those allegations is admittedly not yet known (and where this is a fundamental reason that the plaintiffs themselves assert that the proposed amended statement of claim cannot yet be amended or the proceeding advanced).
The Lawcover/YPOL defendants further say that the implicit suggestion that there were no "significant wasted [costs]" in relation to the "Androulla Claim" (at 109 of the proposed amended statement of claim) is baseless having regard to at least the following matters: that the costs attributable to the "Androulla Claim" are the subject of specific declarations made by the Court of Appeal in Newell v De Costi (see at orders 4-5 where it was declared that each of the plaintiffs was liable to indemnify the respondents in respect of the costs incurred by the respondents by reason of the joinder of Androulla Costi as cross-defendant); the findings of Taylor SC DCJ, adopted by the Court of Appeal (see De Costi (No 6) at [30] and Newell v De Costi at [34]-[35]) (which included findings that: the claim against Mrs Costi was not trivial; and that the claimed damages (which were substantial) were the same as those claimed against the other De Costi parties) were part of the case against her; Mrs Costi was required to swear four substantial affidavits; Mrs Costi was cross-examined extensively; and Mrs Costi was referred to on 13 pages of the sixth further amended statement of claim); the obvious costs necessarily involved in joining any new party to proceedings; and the fact that the hearing of the De Costi proceedings was conducted over some 75 sitting days over five months (see the Wachtenheim Judgment), for which Mrs Costi prepared evidence and was cross-examined.
Further, it is said that the allegations at [108] cannot be sustained for reasons including that: the alleged "conspiracy" that was allegedly "maintained" is not identified (but the Lawcover/YPOL defendants presume is the conspiracy alleged at [32]); and no material facts or particulars are provided to substantiate any allegation that Lawcover, Ms Baxter or Ms Vitalone did anything to "maintain the conspiracy", "collude" or "pervert the course of justice" (with the result that it is said that those scandalous and unsupported allegations must be dismissed as against them). In relation to Mr Yeldham and Ms Vitalone, it is noted that the allegations are, relevantly, that they knew of certain matters which were "apparent from the court record" ([126]) and that, on 3 March 2015, Mr Yeldham "published an advice concerning outstanding exposure to the Androulla Section 345 Claim and the de Costi Section 99 Claims to the First Plaintiff" ([127]). As to this, to the extent that the allegations concern alleged deficiencies or shortcomings in the advice (which are denied), the Lawcover/YPOL defendants repeat their earlier submissions as to legal advice. Further, it is said that the crux of the allegation (at 126) is that Mr Yeldham "continued to hold the intention pleaded at paragraph 51(b)" and again it is noted that there is no "paragraph 51(b)" in the proposed amended statement of claim.
Similarly, as to [108], the Suncorp defendants say that no material facts are pleaded that could amount to the crime of perverting the course of justice; and that what then follows in the proposed amended statement of claim is an analysis of the merits of Mrs Costi's s 345 claim which consists of a challenge to the fact-finding by Taylor SC DCJ.
As noted, complaint is made by Mr Lloyd SC that [108] makes rolled up conclusions without any particulars or cross-referencing so as to explain the allegations. It is noted by Mr Lloyd SC that the date of March 2015 is very different from the May 2013 date which appears in 32 of the proposed amended statement of claim; and that it is also a date that is inconsistent with the only conduct said to have been undertaken by Mr Lloyd SC in furtherance of the conspiracy (which is pleaded at [147] and [154] - see below).

[42]

Paragraphs [131]-[136]: the "planted" evidence allegations

As adverted to above, the allegations made in these paragraphs (assuming the references to the sixth and seventh defendants should be to the sixteenth and seventeenth defendants) are that: Ms Vitalone, at the direction of Mr Yeldham, swore an affidavit which affidavit alleged, "by implication", that Mr Muriniti (assuming the reference to the first defendant should be a reference to the first plaintiff) had been in possession of an affidavit of Mr Vial sworn on 10 January 2012 ([131]-[132]); the implicit allegation above was knowingly false (132); the Vial Affidavit had never been served on Mr Muriniti, he had never heard of it, had never had it on his file or in his possession, "and the : and [sic] was intended to injure [Mr Muriniti]" (132(i)-(ii)); the true position was that Mr Yeldham and Ms Vitalone (it is not said whom) obtained Mr Vial's affidavit from the De Costi Lawyers, and concealed that fact from Mr Muriniti (132(iii)); the Vial Affidavit was provided by the De Costi Lawyers to the YPOL Defendants "in the knowledge that the [Vial Affidavit] would be planted on the Muriniti File" ([134]); the YPOL defendants wrote to Mr Muriniti on 24 July 2015 and enclosed a copy of Ms Vitalone's affidavit ([133]); the De Costi Lawyers and the YPOL defendants: intended to "provide an opportunity for the Lawcover Lawyers or a third party to plant the [Vial Affidavit]" (135] and constructed false evidence that the Vial Affidavit was on Mr Muriniti's file "in anticipation of an assertion by [Mr Muriniti] that he had never had it and that it had been planted" (135); and, upon realising in 2019 that the Vitalone Affidavit "contended for the existence of an affidavit which he had never seen", Mr Muriniti took steps to request documents (which were either refused or were unsuccessful) and "in the premises … [Ms Baxter] agreed with [the YPOL Defendants] and the de Costi Solicitors to conceal the circumstances in which the [Vitalone Affidavit] had implied that [Mr Muriniti] had in his possession the [Vial Affidavit]" ([136]).
The Lawcover/YPOL defendants say that the allegations amount to allegations of criminal conduct, including perjury by Ms Vitalone; and maintain that there can be no proper basis to support the allegation that Mr Yeldham, Ms Vitalone, Mr Lloyd SC, Mr Thorpe, Ms Ng, Mr Stanton and Mr Holmes conspired to "plant" Mr Vial's affidavit on Mr Muriniti's file. Complaint is made that the allegations are of the utmost gravity and should not be permitted to be made, except in the case of clear and cogent evidence. Further, it is said that it is unclear how these allegations tie in with the allegations advanced in support of the claim in conspiracy (and that they appear to be surplusage, in that they are not deployed in support of other allegations). Complaint is made that how these allegations could be causative of any asserted loss or damage is also unclear.

[43]

Paragraphs [137]-[138]: further advices prepared by Mr Yeldham

These allegations are that: 137) On 27 July 2015 Yeldham published an advice to Lawcover in which: (a) A recommendation for a joint offer of settlement from Lawcover and Suncorp was recommended In terms that: (i) Muriniti and Newell pay the de Costi Parties the sum of $300,000 in satisfaction of all claims against them. (ii) Muriniti and Newell to pay the costs of the de Costi Parties of the Section 99 claim and the Androulla Section 345 claim on the ordinary basis. (iii) Each Party to bear their own costs of the de Costi claims pursuant to Section 348. (iv) Muriniti and Newell to each contribute 50% to the offer. (v) That failing an agreement by Suncorp to contribute Lawcover convey an offer of 50% of the recommended settlement ("the Lawcover Offer"). (b) The recommendation was peculiarly generous because: (i) An amount of $105,000 was allowed for the Androulla Claim when there were no significant costs in relation to the Androulla Claim even if liability was established. (ii) Having regard to the matters pleaded in paragraph 109 the Section 99 Claim and the Androulla Claim did not have reasonable prospects of success if properly defended. (iii) The de Costi Parties were for the most part unsuccessful in the section 349 hearing in which very substantial costs were incurred on behalf of Muriniti and Newell and argument about the joinder of Androulla Costi occupied minimal time/resources if any. (iv) The de Costi Parties had brought a claim for $3 million and had put Muriniti and Newell to enormous cost and expense. It did not follow that the de Costi Parties should receive their costs should they recover a small fraction of that sum. (v) The generous nature of the offer was justified in the basis that the Residual Claims were listed for a 3 week hearing in February 2016 and there was justification for saving costs. In fact there was no question of a three week hearing because the Lawcover Parties and Lawcover Lawyers had determined well before then that Muriniti would not give evidence and by August 2015 Newell was induced not to give evidence. 138) Muriniti refused to consent to the offer following which the following events occurred: (a) Baxter compelled Muriniti to consent by applying a deeming provision in his policy. (b) On 15 September 2015 the Lawcover Lawyers wrote to Thorpe and Juliana Ng proposing that the hearing estimate be changed from three weeks to five days in the premises of which they had no understanding or belief that the hearing would take three weeks. (c) On 12 October 2015 (four weeks after the a unilateral offer of settlement to the extent of 50% of the recommended settlement terms was conveyed by Yeldham and Vitalone to the de Costi Parties. (d) The offer was made improperly and without the authority of Muriniti in that the only consent that he had been asked to give (and then deemed to have give) was to an offer exclusively predicated on the need for costs protection in respect of a 3 week hearing. (e) The time for acceptance of the offer lapsed on 9 November 2015 and on 10 November 2015 the Lawcover Solicitors and the de Costi Lawyers consented to an order that the hearing of the Residual Claims be listed for 5 days beginning 15 March 2016 rather than for 3 weeks in February 2016. (f) In the premises of sub-paragraphs (a) to (e) the Lawcover Order was not for the purpose of providing safe costs protection but for the purpose of providing a basis for the de Costi Parties to be held harmless of bringing the costs application irrespective of the merits of that application.
Complaint is made as to the allegation at [137] that Mr Yeldham gave a recommendation that was "particularly generous", namely that this does actually allege any defect in the advice and that it is a vague and ambiguous allegation which is meaningless.
As to the allegation at 138 that the offer of settlement was made "improperly", complaint is made that it is not pleaded how, or why, such an offer was "improper", nor what the consequence of the alleged "impropriety" is in the broader case. Its relevance is said to be obscure.
As to the allegation at 138, it is said that this is another non-sequitur. The Lawcover/YPOL defendants say that the matters alleged in sub-paragraphs (a) to (e), even if able to be established, do not establish the allegation in (f) that an offer (which lapsed) would provide "safe costs protection" for the De Costi Parties or would allow them to be "held harmless of bringing the costs application irrespective of the merits of that application". Complaint is made that the allegation is obscure and nonsensical.

[44]

Paragraphs [145]-[156]: the conduct of the hearings before Taylor SC DCJ and the Court of Appeal

The Lawcover/YPOL defendants say that at the core of the allegations in these paragraphs (which I do not propose here to set out) is dissatisfaction at the way in which litigation was conducted on behalf of the plaintiffs. Apart from the submission that there is no merit in the criticisms which are alleged to support that dissatisfaction, the Lawcover/YPOL defendants complain that the dissatisfaction is used as a springboard to allege the existence of various further conspiracies (or possibly agreements which extend from the overarching alleged conspiracy). It is said that these allegations are manifestly hopeless, for several reasons.
First, complaint is made that there is no attempt to explain how the alleged conduct is linked with the alleged conspiracy beyond the most general assertion that certain findings were made "as a consequence of a collusive agreement" (see at [149]). It is noted that no material facts, nor any particulars, are provided.
Second, it is said that it is apparent from [147] that the allegations again rely on the false premise that the "Androulla claim" resulted in no wasted costs or negligible wasted costs (for the reasons indicated above).
Third, that the core of the allegations at [145]-[149] is to the effect that Mr Lloyd SC and the YPOL defendants, on the ultimate instructions of the Lawcover defendants, did not take every single allegedly available point in the course of the hearing before Taylor SC DCJ, with the result that Taylor SC DCJ made certain findings and orders, and that those findings and orders "were made as a consequence of a collusive agreement". Complaint is made that there is no attempt to explain any collusive conspiracy or agreement between Mr Lloyd SC (who appeared as Counsel), any of the YPOL defendants (who instructed him) and the Lawcover defendants; and no material facts are advanced in relation to this allegation. It is submitted that an allegation that all of those professional lawyers and an insurance company conspired to weaken or lose their own client's/insured's case in proceedings is absurd and nonsensical. The Lawcover/YPOL defendants say that the allegation is scandalous and baseless.
Fourth, it is said that the allegation at [149] assumes, contrary to the Legal Profession Uniform Conduct (Barristers) Rules 2015 (NSW), that Mr Lloyd's forensic judgment should be subjugated to the desires of Mr Muriniti (c.f., rule 4(e)); or that Mr Lloyd SC should act as Mr Muriniti's mere mouthpiece (c.f., rule 42). The Lawcover/YPOL defendants say that it also overlooks rule 43 which provides that a barrister does not breach any duty to a client simply by choosing, contrary to the client's wishes, to exercise the forensic judgments called for during the case so as to confine any hearing to those issues which the barrister believes to be the real issues and to present the case as quickly and simply as may be consistent with its robust advancement. The Lawcover/YPOL defendants say that, even assuming (which is not in fact alleged) that specific instructions were given to make all of the points said not to have been taken, an advocate's decision not to present a case precisely in accordance with the wishes of the client or to take every point the client desires does not point to a conspiracy. (Indeed, they go further to suggest, by reference to other matters or contexts in which criticism of the plaintiffs' conduct of litigation has been made, that if Mr Lloyd SC made forensic decisions to present the plaintiffs' positions in a manner different to their own preference, that was more likely designed to best protect their position in the case rather than to promulgate some conspiracy against them.)
Fifth, insofar as the thrust of [145]-[149] suggests that an adverse judgment of Taylor SC DCJ could not have been based on the strength or weakness of the allegations and evidence carefully considered by his Honour (but instead on the basis of a conspiracy by legal professionals (and an insurer) who allegedly conspired against the plaintiffs to harm them), complaint is made that this is another scandalous and nonsensical allegation without any evidence to support it.
Sixth, reference is made to the Exhibit to the affidavit of Mr James Derek Berg (the solicitor for the Suncorp defendants) sworn 18 March 2021 which includes the appeal books prepared in the appeal from Taylor SC DCJ's judgment. The Lawcover/YPOL defendants submit that the parties' submissions addressed the matters the subject of the allegations at [145] (albeit not necessarily with the granularity which the plaintiffs now allege was required), noting by way of example, that: the allegation at 145, the "unlawful taping" allegation, was addressed at Black 386C-387W; Black 387K-P; the allegation at 145, the "excessive amendments" allegation, was addressed at Black 379K-381O; and that many of the remaining allegations at [145] were either addressed in writing by Mr Lloyd SC (see Black 365) or by Mr Watson SC, whose submissions Mr Lloyd SC adopted (see Black 194I and Black 199Q-R). To the extent they were not addressed, the Lawcover/YPOL defendants repeat their submissions as to the forensic conduct of litigation.
Seventh, it is noted (by reference to the judgment in De Costi (No 6)) that submissions were in fact made in support of Mr Muriniti's position by Mr Lloyd SC and a number of those submissions were accepted by Taylor SC DCJ (reference being made to De Costi (No 6) at [4], [22], [28]ff, [46]-[49], [57], [81], [95]).
The Lawcover/YPOL defendants say that the plaintiffs' allegations appear to proceed on an unstated and incorrect premise; namely, that if particular submissions were made but not challenged (which they say itself is incorrect), it would inevitably follow that Taylor SC DCJ would make findings in accordance with such submissions. The Lawcover/YPOL defendants say that this is another example of the plaintiffs seeking to explain their litigation failure not by reference to the strength of the case against them or their own failures but by alleging a scandalous, fanciful and baseless conspiracy against them.
As to the above allegations at [147] and [154]. Mr Lloyd SC similarly says that: no proper basis for the making of them has been identified or pleaded; the actual creation of the alleged "collusive agreement" is nowhere pleaded (indeed there is not even an allegation that Mr Lloyd SC ever received instructions so inadequately to represent the plaintiffs at the hearing as to bring about orders against his own clients, let alone that he agreed to do such an extraordinary thing).
Paragraphs 147(a) and (b) of the proposed amended statement of claim contain allegations that the "New Suncorp Lawyers" failed to do certain things at the hearing of the Residual Claims on 16-20 March 2016. This pleading is said to be defective as it does not identify which of the three lawyers attended the hearing (and on what days) and when the alleged opportunities to take the certain acts arose. Further, it is said that the allegations again seem to raise forensic decisions taken not to adduce evidence that were made before Mr Andrew had any involvement in the relevant facts and wrongly assume that findings from the substantive proceedings could be challenged.
In Mr Andrew's case, complaint is made that there is no rational basis for the inference sought to be drawn at [149] to be drawn against him. In particular, it is said that: the decision not to adduce evidence from the plaintiffs in relation to the costs application was made in 2015, before Mr Andrew is alleged to have had any involvement in the underlying facts; the submissions for Mr Newell are alleged to have been filed on 16 February 2016 ([146] of the proposed amended statement of claim), only a very short time after Ms Blacker and Mr O'Connor joined Barry Nilsson Lawyers (and Mr Andrew allegedly joined the conspiracy). It is noted that Mr Andrew's alleged involvement (if any) with the filing of the submissions is not identified.
For any inference of the kind alleged potentially to be drawn, it is said that Mr Andrew must have had knowledge of the plaintiffs' responses to the De Costi Parties' submissions but that there is no proper pleading about Mr Andrew's alleged knowledge. It is noted that Mr Muriniti was represented by other solicitors and barristers; and that, insofar as Mr Newell is concerned: first, at [126] of the proposed amended statement of claim there is a (vague) assertion that the facts and circumstances that provided explanations and/or answers to the De Costi Parties' submissions were "apparent from the court record"; and at 146(ii) there is a reference to Mr Newell's response (identified in [113]) as being contained on the file transferred to Barry Nilsson Lawyers.
Mr Andrew says that, leaving aside the vagueness of the allegation at [126], it is not alleged that Mr Andrew had reviewed or had any knowledge of the no doubt very extensive "court record" prior to the filing of submissions or the hearing before Taylor SC DCJ; bearing in mind that Ms Blacker and Mr O'Connor were solicitors at Barry Nilsson Lawyers at the time. However, it is submitted that, even assuming that allegation to be correct, there is no allegation that Mr Andrew reviewed the file that was transferred to Barry Nilsson Lawyers. It is suggested that the lawyers prior to the filing of submissions in February 2016 and the hearing before Taylor SC DCJ in March 2016, Ms Blacker and Mr O'Connor (bearing in mind that Ms Blacker and Mr O'Connor were solicitors at Barry Nilsson Lawyers at these times) presumably understood the (alleged) import of matters there recorded. In any event, it is said that Mr Newell's response was concerned with the illegal tape recording, a matter that could not be challenged at the hearing of the personal costs applications. Further, it is noted that the plaintiffs' liability for costs as a result of Taylor SC DCJ's judgment was the subject of an appeal in which Mr Andrews was involved, and which achieved a measure of success. Again, it is said that, objectively, this speaks against the suggestion that Mr Andrew acted so as to establish a costs liability in the plaintiffs (for which they are indemnified by their insurers).
As to the allegations at [153]ff of the proposed amended statement of claim in relation to the conduct of the appeals on behalf of the plaintiffs, insofar as they concern the Lawcover/YPOL defendants, it is noted that the allegation at 154 and 154(v) is that the "conspiracy was advanced" by Mr Lloyd SC, on the instructions of the Lawcover and YPOL defendants, having "omitted to correct" allegedly false representations made by Mr Stanton in the course of the hearing. The Lawcover/YPOL defendants say that this allegation faces the following difficulties.
First, that it concerns the conduct of litigation; and it is submitted that, to the extent it is advanced against the YPOL defendants, the doctrine of advocates' immunity is a complete bar. Second, that the pleading is silent as to how it is alleged that the Lawcover defendants gave instructions to the YPOL defendants to omit to correct representations in the course of the appeal hearing. Third, that the ultimate purpose of the allegations appears to be to support some sort of collateral attack on the Court of Appeal's judgment but the proposed amended statement of claim is silent as to how the alleged "failure to appeal the matters" has the consequence that the impugned judgment is liable to be set aside. Fourth, that it is apparent from the Court of Appeal's judgment in Newell v De Costi that submissions were in fact made in support of Mr Muriniti's position by Mr Lloyd SC and a number of those submissions were accepted by the Court (reference being made to Newell v De Costi at [65], [118], [126]-[127], [139], [153], [210]-[217], [233]-[234]).

[46]

Damages

As to the damages that the plaintiffs have allegedly suffered because of the conspiracy, the assertion is: Particulars of Damages of Muriniti i. The more than doubling of Muriniti's premiums as a result of the de Costi Costs Claim and the Trustee Costs Claim. ii. Loss of professional income by reason of professional time expended by Muriniti to unravel the conspiracy pleaded herein. iii. Loss of professional income and expenses incurred in attempts at mitigation of damage caused by Muriniti's need to manage the Reference ordered by Taylor DCJ in the Wachtenheim Proceedings as Lawcover and Suncorp could be relied upon to defend claims with relevant regard to Muriniti and Newell's interests and by the 2016 Findings including meeting adverse costs orders in the course of managing the Reference ordered by Taylor DCJ. iv. Loss of professional time in defending costs claims due to the fact that Lawcover could not be reasonably relied upon to defend the claims with regard to the relevant interests of Muriniti and Newell and Lawcover's mala fides intentions toward Muriniti and Newell. v. Loss of opportunity to develop Muriniti's practice by reason of loss of professional time pleaded in (ii) to (iv) above. vi. Aggravated damages by reason that to the knowledge of the Defendants Muriniti suffered and continues to suffer considerable distress by reason of their conduct in contumelious disregard for the harm being done to Muriniti and the continuing consequences of that conduct. Particulars of Damages of Newell i. Loss by reason of forced sale of Newell's chambers at a gross undervalue due to Newell's inability to renew his practising certificate as a barrister. ii. Loss of professional income by reason of time expended by Newell [erroneously described as the Second Defendant] to unravel the conspiracy pleaded herein. iii. Loss of professional income and expenses incurred in attempts at mitigation of damage caused by the need to manage the Reference ordered by Taylor DCJ in the Wachtenheim Proceedings as Lawcover and Suncorp could not be relied upon to defend claims with relevant regard to Muriniti and Newell's interests including meeting adverse costs orders in the course of managing the Reference ordered by Taylor DCJ. iv. Loss of professional income by reason of time expended by Newell in defending costs claims due to the fact that Lawcover could not reasonably be relied upon to defend the claims with relevant regard to Muriniti and Newell's interests and Lawcover's and Suncorp's mala fides intentions directed to Muriniti and Newell. v. Loss of opportunity to develop Newell's career as a barrister over 7 years. vi. Aggravated damages by reason that the to the knowledge of the Defendants Newell suffered and continues to suffer considerable distress by reason of their conduct in contumelious disregard for the harm being done to Newell and the continuing consequences of that conduct. Particulars Justifying Exemplary Damages i. The conduct of the Defendants involved serious dishonesty. ii. The conduct was engaged by insurers who are trusted to operate with utmost good faith toward their insureds and who are authorised to play their role in the system of justice because they are trusted to support the system of justice. iii. The Defendants' pleaded conduct was and is premeditated and was sustained over a number of years with a complete disregard for the damage being caused to Muriniti and Newell. iv. The Defendants' conduct showed a contumelious disregard for the harm being done to Muriniti and Newell. v. The Defendants' conduct was aimed at causing serious irreversible damage to Muriniti and Newell vi. The Defendants' pleaded conduct was aimed at causing serious irreversible damage to Mrs. Young by leaving her vulnerable to an intended fraud and at concealing the fraud perpetrated on her in the Land and Environment Court Proceedings. vii. The Defendants' pleaded conduct was calculated to pervert the course of justice by preventing courts from doing justice and reflected the existence of an existing practice or network for that purpose. c. Newell is entitled to a declaration that the non-renewal of his insurance was effected in bad faith in breach of section 13 Insurance Contracts Act 1984. d. The judgment in De Costi Seafoods (Franchises) Pty Limited and Anor v Wachtenheim and Anor (No 6) [2016] NSWDC 378 is liable to be set aside by reason that it was obtained by fraud, e. The judgment in Newell; Muriniti v De Costi [2018] NSWCA 49 (20 March 2018 is liable to be set aside by reason that it was obtained by fraud. 157) The Defendants are liable in conspiracy: 158) Further, Muriniti and Newell claim and are entitled to interest, whether or not compounded, on all sums found to be due to it at such rates as the Court shall deem just pursuant to the Court's equitable jurisdiction and/or section 100.
Although damages for the tort of conspiracy are "at large", it has been held that the tort of conspiracy requires proof of pecuniary loss (Fatimi Pty Ltd v Bryant (2004) 59 NSWLR 678; [2004] NSWCA 140 at [44] (Giles JA)). In that case at first instance Fatimi Pty Ltd v Bryant [2002] NSWSC 750, Campbell J, as his Honour then was, held at [196] that: There are some circumstances where, notwithstanding that there might have been concerted action to harm someone by breaching a statute, public policy prevents an action for conspiracy from being brought. Thus, even if there were to be a conspiracy to pervert the course of justice by giving false evidence in court, the principle that no liability can attach to a person for the evidence that person gave in court prevents an action for conspiracy from succeeding: Cabassi v Vila. […]
The plaintiffs, however, say that they are not seeking damages for perjury.

[47]

Further issues with the proposed amended statement of claim

Finally, complaint is made that the proposed amended statement of claim is deficient in a number of other respects: first, that, despite being a proposed amended pleading, it does not comply with the requirements of the UCPR for the manner of indication of omitted and inserted matter (such that the reader cannot readily discern the changes from the statement of claim on the face of the proposed amended pleading, and paragraph numbering has not been retained (see r 19.5(4) of the UCPR)); second that it is an incomplete draft, and not in a form that would be appropriate for filing in any event (pointing by way of example to cross-referencing errors (see 127, 132) that are not trivial); placeholders where the drafting of the pleading has not been completed (see 120 and 147); and apparently incorrect or inconsistent party references (see 78, [96], 127, [131], [136], 140 and 141); and third, that many allegations in the proposed amended statement of claim are unnecessarily prolix and discursive. It is said that the allegations are often rolled-up, do not conform with the requirement that each matter be put in a separate paragraph (c.f., r 14.6(b) of the UCPR), and could not be said to be as brief as the nature of the case allows (c.f., r 14.8 of the UCPR) (referring by way of non-exhaustive example to [36], [37], [41], [42], [117]-[123]).
Some parts of the proposed amended statement of claim are unintelligible: some sentences are incomplete (see, for example, 120(g), 123(c), 132(i) and 146); the term "Suncorp Lawyers" is used although that term is not defined; and on a number of occasions there is an incorrect description of parties (and it is noted that whilst the likely intended party can be identified, it may not be safe to make any assumptions given the fanciful nature of the plaintiffs' allegations).
I accept the force of these criticisms of the pleading but nothing here turns on them in circumstances where the plaintiffs do not wish to pursue an application for leave to file the proposed amended statement of claim in this form (or indeed any pleading at this stage).

[49]

Plaintiffs' response to defendants' submissions

Insofar as the defendants have identified pleading deficiencies, the plaintiffs reiterate is that it was acknowledged at all times by them that the original statement of claim would not be the pleading going forward (and I note that remains the position with the proposed amended statement of claim). It is suggested that the course taken (by Lawcover) of attacking the statement of claim "as though it was the document on the basis of which the Plaintiffs did intend to proceed" must be for the purpose of draining the resources of already vulnerable people.
The plaintiffs reiterate their position that they have not been in a position to amend the statement of claim by reference to the impediment referred to earlier (i.e., the fact that the outcome of the costs reference is not known and the concern that the kind of amendment they would wish to make would be an abuse of process since it would involve matters relating to the conduct of the costs reference and District Court proceedings not yet finalised). It is said that the impediment to amendment is not a matter within the plaintiffs' control.
The plantiffs say that it is not correct to say that the proceedings cannot be advanced until the proposed assignment of Mrs Young's cause of action is complete. They maintain the position that, insofar as proceedings are taken on a cause of action assigned by the trustee in bankruptcy for Mrs Young, it may be appropriate to consider how those proceedings are heard insofar as there is a risk of inconsistent findings. Further, they say that there is a likelihood of proceedings to set aside costs orders made against the plaintiffs in March 2017. Nevertheless, the plaintiffs say that it is not their position that the instant proceedings cannot progress without those (other) proceedings being commenced.
Insofar as reference is made by the defendants to the decision of Bromwich J, in which criticism was made of the pleaded conspiracy in the Young v Hones litigation, it is said that the decision did not include a reference to the evidence upon which reliance was placed but that, for present purposes, that does not matter because, at the time of the hearing before Bromwich J, the plaintiffs were "frankly not in a position to articulate the conspiracy" in the terms reflected in the memorandum subsequently outlining the conspiracy (exhibited to Mr Muriniti's affidavit sworn 31 August 2021). It is said that, in the circumstances, Bromwich J was correct in concluding that the plaintiffs had not distilled the essence of the conspiracy (and that Bromwich J's decision was "instructive" to the plaintiffs). Further, they say that, if Lawcover wished to discredit the idea that Mrs Young was the victim of a conspiracy, then it was open to Lawcover to point out where there was an internal or external inconsistency in the account provided in that exhibit. The plaintiffs maintain that Mrs Young was the victim of a conspiracy and that Mrs Young did not understand the workings of the conspiracy because it was "adroitly concealed". Indeed, it is said that the plaintiffs did not grasp the essence reflected in the memorandum exhibited to Mr Muriniti's affidavit until much later than the decisions referred to by Lawcover. The plaintifs say that any assertions by Lawcover that the conspiracy is fanciful should be supported by indications of external or internal consistencies in that exhibited memorandum. The plaintiffs further contend that it is "tolerably plain" that the need to conceal a conspiracy of the kind revealed in the account exhibited to Mr Muriniti's affidavit would launch efforts of the kind pleaded by the plaintiffs.
Insofar as there has been an accusation that the plaintiffs have prepared the statement of claim in breach of the Australian Solicitors' Conduct Rules, the plaintiffs say that there is no basis to suggest that the plaintiffs were not at all material times in possession of adequate information to plead a conspiracy such as that alleged (which I interpose to note rather begs the question as to why it has not already been properly pleaded). The plaintiffs (again seeming to see conspiracies everywhere) say that they are entitled to consider that the submission by Lawcover in this regard "was intended to intimidate".
As to the submissions which refer to the undue prolongation of these proceedings, the plaintiffs say that this ignores the fact that the plaintiffs "have no control over when the facts will be known concerning the substance or not of the de Costi Parties' claims for wasted costs in connection with the declarations of the Court of Appeal". The plaintiffs reiterate that they have made applications for orders on more than one occasion to force the progress of the costs reference. It is submitted (in yet another instance of attributing sinister motives to conduct of the parties) that if Lawcover considers that in these circumstances there is a cogent basis to seek a dismissal then the plaintiffs "are bound to consider that the de Costi Parties are seeking to delay the progress of the Reference in order to frustrate the proceedings in this Court (for the benefit of the parties wishing to avoid dealing with them on the merits)".
As to the submission that the continuation of the proceedings will result in significant wasted costs and court resources, the plaintiffs say that they sought from the very outset to avoid wasted costs and a tax on court resources by proposing a stay until they were in a position to prepare the pleading which they could hold out as going to trial. It is said that there was no need to incur large amounts of costs; nor was there any need to inundate the plaintiffs "with irrelevant evidence which they felt constrained to answer to protect themselves"; and further that "[t]here was no need by that device to distract from the Plaintiffs' task of cutting through obstacles to get the Reference completed expeditiously"; nor for "the charge of copycat applications for summary dismissal". It is submitted that insofar as there are wasted costs by reason of "obstructionism" in the costs reference the appropriate course is for those costs to be paid by the De Costi Parties and their legal representatives.
As to the submission that the proceeding should be dismissed for want of prosecution because the plaintiffs seek a stay, the plaintiffs complain that Lawcover does not submit how a claim to deal with the kind of damage claimed can be justly dismissed because the Reference has been perversely prolonged; or that there is something else that the plaintiffs ought to have done.
Pausing here, the submissions in the response of the plaintiffs are here premised on the outcome of the costs reference being necessary in order for the claim to be properly pleaded. I do not accept that premise as being correct.
As to the complaint by Lawcover (at [25] of its submissions) that the plaintiffs saw fit to commence proceedings notwithstanding that they appear to have accepted from the very outset that the statement of claim required amendment and therefore could not go forward, the plaintiffs say that there was an arguable time bar on 24 April 2020, the threat of which was averted by the filing of the statement of claim; and reiterate that they were not in a position to effect the amendments necessary to take the matter to trial until further facts were known and final orders made. It is said that "[s]omething to avert a limitation problem had to be filed although because of the peculiar prolongation of the Costs Proceedings and reference, many highly material facts were not yet known" and that if the facility to file a writ with a statement of claim to be delivered later had still been available, then that is what the plaintiffs would have done. (Pausing here, the fact that in the past there might have been an acceptable different way of proceeding that is not now available to the plaintiffs is not to the point.)
As to the costs reference, the plaintiffs say that it has "not produced the facts that it was intended to produce" after two and a half years; and that the statement of claim could not have taken a form reflective of those facts before they are known (and, as noted more than once, the plaintiffs say that they have taken steps to impel the costs reference to an expeditious conclusion).
Insofar as it has been submitted that the object of the conspiracy has not been identified and that confusion arises by reference to a purpose of injuring the plaintiffs through underwriting consequences with the object of injuring Mrs Young, the plaintiffs say that reference to these two objects does not produce confusion; and that: It is plain enough that the conspiracy is directed at the Plaintiffs and at injuring them and to do so by unlawful means. It is equally plain that in so injuring the Plaintiffs the unlawful object of the unlawful means conspiracy was to pervert the course of justice in relation to proceedings either brought or contemplated by Mrs. Young.
The plaintiffs say that their claim is that the conspiracy (as I understand it with regard to the declinature of renewal terms or imposition of higher premiums) was directed to injuring the plaintiffs and had the object of perverting the course of justice in connection with Mrs Young's proceedings. The plaintiffs say that the way Mrs Young could be affected by the denial of renewal terms is clear: that she would be denied legal representation generally and, in particular, if Mr Newell was intimidated "by the fear of enormous irremediable damage" to drop Mrs Young's case. It is said that, in the event, Mr Newell chose to continue representing Mrs Young as a solicitor employed by Mr Muriniti "at great costs to himself" and that this was possible because of Mr Muriniti's "almost certainly unforeseeable preparedness to take on the burden of employing Mr Newell in order to ensure Mrs. Young was not left without legal assistance".
Insofar as complaint is made in Mr Watson SC's submissions (at [49]) that the tranche of the pleading relating to him makes no mention of injury to Mrs Young, the plaintiffs say that this again misstates the claim. The plaintiffs emphasise that the unlawful object of the conduct directed to the plaintiffs was to pervert the course of justice in relation to Mrs Young's proceedings (whether or not she was injured).
As to the suggestion (in the submissions of Mr Watson SC at [51]) that it is not clear whether these agreements were express or are the be inferred from overt acts, the plaintiffs say that the pleading can only be understood as relying upon overt acts to infer an agreement. It is said that the agreement may well be express but that in this, as in practically every other conspiracy case, it must be approached by pleading a pattern of conduct. The plaintiffs say that the proposed amended statement of claim contains enormous detail of overt acts (patterns of conduct) from which the conspiracy may be inferred.
The plaintiffs say that, to the extent that it is implied that there needs to be a specific pleading of the facts of which Mr Watson SC knew of the conduct of the other defendants said to be done in furtherance of the conspiracy, Mr Watson SC's knowledge "is inferred from his consistent pursuit of the pleaded objects of the conspiracy". It is said that the proposed amended statement of claim specifically pleads that Mr Watson SC had knowledge of the De Costi Parties' material conduct "through the Court record to which he had access". The plaintiffs submit that it cannot be correct to suggest that Mr Watson SC must be shown to have specific knowledge of each act of other participants in the conspiracy and that knowledge of each of these acts must be pleaded. (Pausing here, this is reminiscent of the conspiracy allegations in the Young v Hones proceedings as to knowledge by reference to access to plans that were available to the alleged conspirators.)
As to the submission made to the effect that Suncorp had no knowledge of the plaintiffs' involvement in the Wachtenheim Proceedings in 2011 until 28 June 2012 and therefore could not have agreed or combined with the De Costi Parties in respect of conduct which took place in 2011, the plaintiffs say that the proposed amended statement of claim pleads in detail facts which show special knowledge by the De Costi Parties from no later than mid-2011 "that they might bring a costs application which would perversely not be properly defended by Suncorp and Lawcover" as the insurers of Mr Newell and Mr Muriniti. It is said that that special knowledge can only be referable to an agreement. (Such a conclusory and rolled up allegation cannot be a proper pleading - and this fails to address the need for precise pleading of material facts for such a serious claim.) The plaintiffs point in this regard to the allegation in the proposed amended statement of claim that Mr Stanton "glibly announced" in October 2012 that an intended costs application against Mr Newell and Mr Muriniti (which costs application had been in the planning since no later than June 2011) would have the result that the plaintiffs would be denied renewal terms (see [79]). It is said that Mr Stanton's special knowledge that (unforeseeably) the plaintiffs would be denied renewal terms could only rationally be arrived at by means of communications with Lawcover and Suncorp (or someone on their behalf) the purport of which was an agreement that a non-renewal would be effected by the De Costi Parties proposed costs application. (Again, this is argument by inference and does not take into account the possibility of an equally available innocent explanation.) The plaintiffs say that this is a fortiori the case where, as is pleaded in the proposed amended statement of claim, the claim by the Wachtenheim Parties "was not characterised by a lack of provable facts to support a claim under the [Legal Profession Act]".
The plaintiffs contend that, as to his involvement in the conspiracy, Mr Watson SC engaged in the "most telling conduct so far as concerns the proof of the purpose and fact of the conspiracy" (in that Mr Watson SC was responsible for inducing Mr Newell not to give evidence). It is said that Mr Watson SC attempted to induce Mr Newell formally to accept liability for the illegal taping allegation on a specious basis; and that Mr Watson SC did not have a proof of evidence from Mr Newell in relation to the circumstances of the illegal taping allegation although the judgment of Taylor SC DCJ "called out" for Mr Newell's evidence. The plaintiffs say that Mr Watson SC was informed at the conference on 24 August 2015 that a detailed response by Mr Newell to the Legal Services Commissioner in relation to the illegal taping complaint made by the De Costi Parties (the Response) existed, when Mr Newell asked if Mr Watson SC had been briefed with it. The plaintiffs say that the Response was a detailed statement, the purport of which was that Mr Newell had nothing to do with instigating the so-called illegal taping and the taping was not planned at all. It is said that this evidence was on all fours with, and corroborated, the evidence of Mr James Turner concerning the circumstances of the taping by James Turner. The plaintiffs say that Mr Watson SC thereafter either read the Response (the existence of which was brought to his attention) or "deliberately refrained from reading it by reason of a fixed intention to burden [Mr] Newell with adverse findings concerning the taping".
Further the plaintiffs maintain the accusation that Mr Watson SC falsely represented to the Court of Appeal that Mr Newell had actually done the taping, which it is said he pressed until the Court of Appeal itself called upon him to reconsider the submission. The plaintiffs say that "[p]lainly the illegal taping allegation had become the jewel in the Crown of the plan to justify a non-renewal". Finally, it is said that, insofar as the taping was not planned (a matter for which they maintain there was ample evidence), there could have been no intention to publish the recording of the conversation to a third party to the conversation and thus the taping could not even have been illegal given the terms of s 7(3) of the Surveillance Devices Act 2007 (NSW).
The plaintiffs complain that, notwithstanding all of these matters, Mr Watson SC not only offered no challenge to the illegal taping allegations when the De Costi Parties advanced their s 99 claims at the hearing in March 2016, but Mr Watson SC conveyed positively and expressly to the Court that he had no challenge to make to the allegations. Moreover, it is said that Mr Watson SC prepared submissions for that hearing which in substance did not challenge any of the De Costi Parties' s 99 claims.
The plaintiffs submit that the conduct of the De Costi Parties in making and pressing on with the claims (in circumstances that the answers to the claims were to the knowledge of both the De Costi Parties and Mr Watson SC and those who instructed him) indicated special knowledge that (otherwise unforeseeably) the s 99 claims would not be defended. Also, it is said that the claim relating to the joinder of Mrs Costi might have been defended by pointing out that Mrs Costi only swore two affidavits for the purpose of the Wachtenheim cross-claim (which affidavits the plaintiffs say contained a single sentence material to the claim against Mrs Costi personally). It is said that these matters were known to the De Costi Parties, in the premises of which they could only have advanced the Mrs Costi claim on the foundation of special knowledge that it would not be effectively challenged.
Insofar as reliance is placed on the principles of advocate's immunity, relying upon the decision in Bodycorp, the plaintiffs contend that Bodycorp properly turns upon the unexceptional proposition that the witness immunity in relation to giving false evidence cannot be circumvented by devices such as pleading a conspiracy to procure the perjury that is the real cause of damage. It is said that there was no substantial argument as to whether the advocate's immunity would protect in relation to fraudulent conduct by an advocate.
The plaintiffs address in their submissions in some detail the historical derivation of the defence of advocate's immunity, referring to the decision in Swinfen at 919 (Pollock CB). The plaintiffs emphasise the proviso there stated to the effect that the conduct be done bona fide; and that if a barrister intentionally does a wrong and acts with malice, fraud or treachery, the barrister would be responsible like every other wrongdoer. It is submitted that the words "bona fide" as a matter of authority, principle and compelling common sense qualify the availability of the advocate's immunity defence.
The plainitffs say that the defendants' submission also runs counter to other decisions of the Court of Appeal and other intermediate Courts of Appeal, arguing that the decision in Young v Hones was obiter and in relation to an interlocutory matter; and that the question whether the advocate's immunity protects against fraudulent conduct is a question of considerable public and juridical importance that has never been considered by the High Court. It is submitted that the question whether the immunity can attach to counsel in relation to fraudulent conduct is ripe for serious judicial consideration and full argument on all of the facts; and that the development of the law in this regard should not be stultified (by use of the summary dismissal processes).
Further, it is submitted that in the case of a judgment obtained by fraudulent collusion there is no finality to be protected from collateral challenge and that a judgment obtained by fraud can be challenged in collateral proceedings. The plaintiffs say that the rationale for allowing a fraud exception to finality is that it is right that a party who can show that his or her ability to mount an effective case was compromised by the fraudulent conduct of the other party should not be bound by a judgment that was thereby obtained (referring to the statement by Williams J in Cabassi v Vila at 147 to the effect that "judgment which is procured by fraud is tainted and vitiated throughout" and may be treated as a nullity).
Reference is also made to the decision of the High Court in Attwells, referring to the decision of the majority at [35], and arguing that a judgment obtained by fraudulent collusion is not a "lawful result" and not "lawfully obtained". It is submitted that to extend the reach of the advocate's immunity to the conduct of advocates involved in collusion leading to a judgment which is a nullity, or obvious exception to the finality principle, is not necessary in the interests of the administration of justice and would in the majority's words profoundly "decouple the immunity from the protection of the exercise of judicial power against collateral attack" (see at [41]). The plaintiffs say that nothing is more calculated to bring the system of justice into disrepute than to allow legal practitioners who conspire to perpetrate a fraud on the court to the serious irremediable detriment of their client to "wave off accountability"; also referring to the observations of Bathurst CJ in Jackson Lalic Lawyers Pty Ltd v Attwells [2014] NSWCA 335 as to the justification for witness immunity being finality of litigation, the plaintiffs in essence contending that where a judgment is set aside by reason of the fraudulent collusion of advocates there is no finality to be protected.
Further, as to Mr Doyle Gray it is said that there is no basis for this submission because the Trustee Costs Application in which Mr Doyle Gray played a role did not lead to any final judicial decision on the merits. It is noted that the Trustee Costs Application was resolved when the Trustee voluntarily discontinued her claim.
The plaintiffs say that the damage of which they complain was not caused by any judicial decision or consideration; rather, that it was caused by the mere filing and service of the Trustee's claim in the form of the Trustee's notice of motion and points of claim on which Suncorp and Lawcover purported to rely to effect seriously adverse consequences for the plaintiffs. It is said that the damage was caused independently of any judicial decision or consideration; not by any step preliminary or otherwise as to how the cause would be conducted in Court. It is said that it was caused by the mere agreement to file and serve a claim upon the plaintiffs without more. Thus, it is said that the plaintiffs' claim so far as concerns Mr Doyle Gray or Ms Searle does not and cannot involve any challenge to a judicial decision.
As to the submission in relation to witness' immunity, the plaintiffs do not dispute that no claim for damages can be mounted by reason of alleged perjury; nor can that prohibition be circumvented by pleading a conspiracy to suborn perjury. However, the plaintiffs say that no claim is made that the evidence of Mr Shnider or anyone else is causative of damage. Insofar as there are allegations in the proposed amended statement of claim as to evidence given by Mr Shnider in Court, the plaintiffs say that those allegations are only to establish overt acts evidencing Mr Shnider's participation in an agreement to injure (that they are not alleged to be causative of damage) (citing Lee v Adedian [2016] QSC 92 at [97] (Bond J)).
As to the submission that the plaintiffs' claim involves impermissible re-litigation, the plaintiffs say that this submission misapprehends the claim. The plaintiffs say that the allegations said to amount to an attempt to relitigate are the basis for the setting aside of the District Court costs judgment by reason that the judgment was obtained by fraudulent collusion.

[50]

Vexatious proceedings

As to the complaint about repetition of similar claims already determined and rejected, it is noted that the power of a court summarily to dismiss or stay proceedings derives from its power to prevent misuse of its procedure. In this respect it is noted that "the Courts' processes should not be permitted to be used as a vehicle for the pointless repetition of evidently baseless allegations of fraud".
The Suncorp defendants point out that the present proceeding is not the only case where the plaintiffs have made claims of conspiracy and fraud. It is noted that the plaintiffs have brought claims of conspiracy and fraud on their own behalf, or on behalf of others, since 2007. It is said that there are at least 19 occasions in which the plaintiffs have advanced claims of conspiracy in the District Court, the Land and Environment Court, the Supreme Court, the NSW Court of Appeal, the Federal Circuit Court and the Federal Court of Australoa; and that on each of those occasions, the allegations have been riddled with the same deficiencies as those identified here. It is noted that, for many of those claims, consequently, personal costs orders have been made against the plaintiffs.
The Suncorp defendants say that the first time the plaintiffs raised a claim of conspiracy was in the case of Dean v American Express International, (Supreme Court (NSW), Charteris J 23 March 2007, unrep). Those proceedings were initially in negligence. However, after the involvement of Mr Newell and Mr Muriniti, as counsel and solicitor for the plaintiff, the claim was amended to include an allegation that the defendants had conspired together with the intention of causing injury to the plaintiff. The issue of conspiracy took not less than 75% of the hearing time (it was said to have "consumed" the hearing). After twenty-one days of evidence, Charteris J concluded that "there was absolutely no evidence of any conspiracy between the first, second and third defendants or any of their employees or partners". On 17 August 2007, his Honour made personal costs orders against Mr Muriniti and Mr Newell.
The Suncorp defendants say that, since then, Mr Newell and Mr Muriniti have persisted with advancing claims of conspiracy and fraud. It is noted that the plaintiffs' conduct has been heavily criticised by the Courts and their conduct has been referred to the Office of Legal Services Commission for investigation into unsatisfactory professional conduct or professional misconduct. Suncorp and Mr Watson rely on Mr Coorey's summaries of relevant findings against a conspiracy.
It is noted that, more recently in Muriniti v Mercia Financial Solutions Pty Ltd [2021] NSWCA 180 (Muriniti v Mercia Financial), the Court of Appeal upheld a personal costs order against Mr Muriniti arising from the Glover v Kaji Australia Pty Ltd proceedings. In Kaji Australia Pty Ltd v Glover (No 4) [2019] NSWSC 1779, Mr Muriniti alleged on behalf of his client that the cross-defendants had engaged in fraudulent misrepresentation and conspiracy to defraud the defendant. At the time, Mr Newell was an employee or consultant of Mr Muriniti, or Mr Muriniti's law practice. Davies J dismissed the cross-claim, finding that: 288. The matters put forward by the defendant to suggest a conspiracy are entirely insufficient and inadequate to do so. Lawyers have ethical responsibilities not to plead or allege fraud and other criminality without a proper basis to do so. It is difficult to see in the present matter how those ethical responsibilities have been complied with. Any conclusion that there has been fraud or conspiracy here by the cross-defendants is only attainable by speculation and a predisposition to believe it.
Davies J also found that submissions made by Newell during the hearing had been "improperly made … without any evidence to support it" (see at [143]). The judgment was upheld on appeal (Glover v Kaji Australia Pty Ltd [2020] NSWCA 222). White JA expressly endorsed the finding by Davies J in respect of the submissions by Mr Newell. Macfarlan JA, with whom Bathurst CJ and White JA agreed, concluded that "the claim against Mr Nicholson was bound to fail" (see at [38]). Similar findings were made with respect to the claim against another cross-defendant, Mr Shields.
Following the appeal, Davies J made costs orders against Mr Muriniti, to indemnify some of the cross-defendants, holding that the cross-claim was in breach of Mr Muriniti's professional and ethical obligations (Kaji Australia Pty Ltd v Glover (No 5) [2020] NSWSC 1576). Davies J held: 80. … nothing in the evidence of Mr Muriniti which demonstrates that he had provable facts to justify the claims, nor a reasonably arguable view of the law to form a reasonable belief that the fraud and conspiracy claims had reasonable prospects of success. In my opinion, the legal services, insofar as the claim was made against Mr Nicholson, Mr Shields and the plaintiffs for fraud and conspiracy were provided without reasonable prospects of success.
In Muriniti v Mercia Financial, the Court of Appeal upheld the costs judgment. In doing so, the Court concluded: 121. It is to be emphasised that the present was not a case where the underlying claim was simply unsuccessful or even hopeless. It had the added dimension that the nature of the allegations made were of the utmost gravity and engaged the well-known principles of professional conduct embodied in the Conduct Rules calling for due circumspection and care in the making of such allegations.
The Suncorp defendants say that it is evident that for some fourteen years, Mr Newell and Mr Muriniti have persistently and repeatedly sought to advance claims of conspiracy and fraud with complete disregard to the necessary legal and factual basis to establish such a claim, the ethical and professional obligations in making such serious allegations, and the time and cost consequences for their clients, the other parties and themselves.
Since the plaintiffs' involvement in Mrs Young's legal proceedings in around 2004 alleging conspiracy, the substantive relief sought in the Young v King proceedings has taken over nine years to resolve (determined against Mrs Young as completely without foundation), with numerous costs applications (determined against Mrs Young). Further proceedings brought by Mrs Young also alleging conspiracy (Young v Hones proceedings) have taken seven years finally to determine (against Mrs Young as completely without foundation, and two refusals of special leave), with additional costs applications determined against her. In that time, Mrs Young was declared bankrupt and sequestration orders were made. As disclosed in those proceedings in 2017, as at that time, Mrs Young owed Mr Muriniti approximately $3,000,000 for legal fees incurred in relation to all the litigation in which his firm has acted for her, with those fees secured by way of unregistered mortgage and caveat over her residential property. That debt comprised over 75% of her total debt.
The Suncorp defendants say that the present proceeding is one further reiteration of that same pattern of conduct by Mr Newell and Mr Muriniti.
The Suncorp defendants submit that, having regard to this litany of findings of baseless allegations of serious misconduct it would be open to the Court to make orders under s 8 of the Vexatious Proceedings Act 2008 (NSW) (Vexatious Proceedings Act) precluding the plaintiffs from commencing or maintaining any proceedings against any of the parties to the De Costi proceedings, any of the legal representatives of the parties to the De Costi Proceedings or the Costs Applications, or against Lawcover or Suncorp (or any employee thereof) without further leave of the Court (save that any such order would not preclude the plaintiffs from taking any steps with respect to the costs matters arising in the existing proceedings in the District Court of NSW).
It is noted that a submission to that effect was originally made in the submissions served on 8 October 2021 by Suncorp and Mr Watson in relation to the original statement of claim; and it is submitted that the plaintiffs have had the opportunity to respond to those submissions (thereby being afforded procedural fairness) and have chosen not to do so. It is said that there is therefore no impediment to the Court making orders under s 8 of the Vexatious Proceedings Act and having regard to the continuing history of baseless allegations of conspiracy and serious misconduct the Court ought do so. The Suncorp defendants do not themselves make such an application (and appear to be concerned that they may not have standing to do so) but invite me to make such an order of the Court's own motion.

[51]

Determination

The issues that remain for determination as between the parties (following the striking out of the original statement of claim) are therefore: whether, on the plaintiffs' application, the proceedings should be stayed pending the outcome of the costs reference in the De Costi proceedings (or the conclusion of those District Court proceedings) (or, alternatively, although this was not ultimately pressed, whether leave should be granted to the plaintiffs to file an amended statement of claim); or whether, on the defendants' applications, the proceedings ought be summarily dismissed (as an abuse of process or for want of prosecution) or permanently stayed. There is also the issue, raised in submissions, as to whether, on my own motion, I should declare the plaintiffs to be vexatious litigants other than in relation to the finalisation of the District Court proceedings relating to the costs applications in the De Costi proceedings.
At the outset, I note that the description by Bromwich J in Young v Hughes Trueman at [41] appears here to be more than apt when considering the claims sought to be advanced by the plaintiffs (although I accept that the plaintiffs have not yet finalised the pleading that they would wish to take to trial nor has any evidence been filed as to the substantive claims). His Honour there noted that the plaintiffs "never came close to excluding a range of possible innocent explanations, such as mistake or miscommunication, or even adverse conduct by the neighbours and their advisors independently, relevantly, of the respondents". Similarly, one might well think it unlikely that the plaintiffs would be able to exclude possible innocent explanations for a raft of the matters of which complaint is made (forensic decisions in the context of litigation, for example, such as the advice as to whether to seek indemnity costs in relation to the Trustee Costs Claim or as to whether Mr Newell should give evidence in relation to matters such as the illegal taping allegation, or seemingly innocent events such as a request by the incoming lawyer, Mr Connellan, for a meeting to discuss the proceedings in which he had just been retained). Bromwich J said, at [43] that it "simply will not do for any party in litigation to make such serious allegations upon nothing more substantial than a bare assertion that this is the only possible explanation for what has transpired". I agree.
As to the claims articulated by the plaintiffs, there is no doubt that what is alleged is a fraudulent (and concealed) conspiracy to injure by unlawful means and that this requires the plaintiffs to plead an agreement or combination between two or more persons to engage in conduct amounting to "unlawful means" with the intention of injuring the plaintiffs; as a result of which the plaintiffs suffer loss (see Weston v Publishing and Broadcasting Ltd (2011) 83 ACSR 206; [2011] NSWSC 433 (Weston v PBL) at [612]; CC Containers v Lee [2011] VSC 537 (CC Containers) at [12] (Ferguson J, as her Honour then was)).
There can be no doubt that the general pleading requirements (in particular, the requirements that a pleading set out the material facts on which a party relies in support of its case; that facts that might take a defendant by surprise be specifically pleaded; that the material facts be contained in the pleadings rather than supplied by particulars; and that the pleading give such particulars as are necessary to enable the opposing party to identify the case that the pleading requires to be met - see rr 14.7, 14.14; 15.1 of the UCPR) are of fundamental importance when very serious allegations of fraud, conspiracy, attempts to pervert the course of justice and criminal conduct are made (as is the case here). Clear and cogent evidence is ultimately required for such allegations to be established.
It is well established, and Mr Newell readily accepted, that serious allegations of this kind should not be made lightly and that they must be clearly pleaded and particularised (see, for example, Hughes v Western Australian Cricket Association (1986) 69 ALR 660; [1986] FCA 465 at 706 (Toohey J, as his Honour then was) (Hughes); Australian Wool Innovation Ltd v Newkirk [2005] FCA 290 at [59] (Hely J); Young v Hughes Trueman (No 4) at [39]; Central Exploration Pty Ltd v Zuks [2020] WASC 46 at [120] (Allanson J); Johnston v Smith [2002] NSWSC 409 at [25] (O'Keefe J)).
The defendants also emphasise the recognition by courts (see, for example, by Bell, Keane and Nettle JJ in Berry v CCL Secure Pty Ltd (2020) 94 ALJR 715; [2020] HCA 27 at [39] that "the conventional perception is that members of our society do not ordinarily engage in fraudulent conduct" (their Honours their referring to Neat Holdings v Karajan Holdings at 171) and that this perception underpins the need for clear evidence of fraud. Further, it is noted that fraud, or participation in fraud, "particularly where it is alleged against a legal practitioner is a serious allegation" (see Simmons v NSW Trustee and Guardian [2013] NSWSC 1688 at [35]).
Emphasis is placed by the defendants on the fact that, where the alleged conspiracy is inferred from the acts carried out by the parties in alleged performance of it, it is necessary for each of the parties to the conspiracy to be "sufficiently aware of the surrounding circumstances, and share the same object, for it properly to be said that they are acting in concert" (see, for example Dresna Pty Ltd v Misu Nominees Pty Ltd [2003] FCA 1537 at [103] (Weinberg J)).
In Dresna Pty Ltd v Misu Nominees Pty Ltd [2004] FCAFC 169, Kiefel J (as her Honour then was) and Jacobson J said (at [9]), said (quoting McWilliam v Penthouse Publications Ltd [2001] NSWCA 237 at [13] (Mason P, as his Honour then was)) of the essential requirement, in a conspiracy claim, of intent to injure the plaintiff that it is "is not enough to establish that the acts of the conspirators necessarily involved injury to the plaintiff or that the plaintiff was a person reasonably within the contemplation of the conspirators as a person likely to suffer damage" rather, that the "intention must be directed to the particular person [who] makes the claim for loss and damage". At [12] their Honours said that: 12. The test for an action based upon a conspiracy is what was the object in the mind of those combining when they acted as they did: Crofter Hand Woven Harris Tweed Co, Ltd v Veitch [1942] AC 435 at 445. As is pointed out in WVH Rogers, Winfield and Jolowicz on Tort, … what is required is that they should have acted in order that, not with the result that, the plaintiff should suffer damage. …
As the defendants have noted, there are also specific pleading requirements where the pleading alleges a condition of mind of a company (such as Lawcover, Suncorp or the De Costi companies) (see Brambles at 279 (Bright J)).
In the present case, the proposed amended statement of claim (far from demonstrating that the plaintiffs' claim is not illusory - as they have suggested was the purpose of its service) suffers from serious pleading deficiencies (as highlighted in the defendants' submissions), not least including the failure to plead the facts, matters and circumstances relied upon for the various alleged agreements or understandings, the knowledge by particular alleged conspirators of the alleged conspiracy (particularly those who it is alleged only joined the conspiracy at a later time) and the basis for the asserted intent to injure the plaintiffs. There is much force in the complaint that the connection between the various events and alleged conspirators is not made clear; and that much of the pleading consists of rolled-up conclusions. Moreover, the material facts to show that the defendants were dishonest or guilty of fraud (and not merely negligent), or otherwise acted in ways that were not the result of bad faith or other impropriety (i.e., facts, matters and circumstances which are not equally consistent with innocence) are not pleaded. Serious allegations of conspiracy, fraud and perverting the course of justice should not be made lightly, and must be clearly and precisely identified (see Hughes at 706; Weston v PBL [2011] at [652]).
As observed in Weston v PBL there is a distinction to be drawn between facts from which one might infer an agreement on the one hand; and facts which might be consistent with an agreement having been made, but which are equally consistent with no such agreement having been made on the other hand. I accept the defendants' submission that the proposed amended statement of claim clearly falls into the latter category: the plaintiffs do not plead facts from which one can infer that there was a prior agreement to injure by unlawful means; they simply make allegations as to what occurred and then assert that those acts were "decided" in advance (see Weston v PBL at [641]).
Insofar as the proposed amended statement of claim suffers from other problems (such as the wrong identification of parties or typographical errors or the like), I place less weight on such defects because it is clear that the plaintiffs wish to amend the pleading in any event and it might be expected that those would be remedied in due course. It would, however, be a concern if this matter were to follow the course of other proceedings in which the plaintiffs have been involved with a succession of amended pleadings.
Nevertheless, I have a very real concern with the proposed amended statement of claim which is that it does not plead with sufficient clarity or particularity the claim of conspiracy here sought to be advanced. Moreover, there are aspects of the proposed amended statement of claim that amount in my opinion to an embarrassing pleading, as I have identified above. A pleading that is "unintelligible, ambiguous, vague or too general, so as to embarrass the opposite party who does not know what is alleged" is embarrassing and liable to be struck out under rule 14.28(b) of the UCPR (see Meckiff v Simpson [1968] VR 62 at 70, quoted with approval in McGuirk v The University of New South Wales [2009] NSWSC 1424 at [30] (Johnson J)) and leave to amend will not be granted in respect of a pleading of that kind (see Nguyen v QTQ Mechanical Services Pty Ltd [2019] NSWSC 1629 at [39] where I cited various authorities for that proposition).
Therefore had the plaintiffs (which they do not) pressed for leave to file this particular document, I would have refused that leave; and I accept that the proposed amended statement of claim as presently drafted does not disclose a reasonable cause of action in conspiracy.
As to the submission that, having regard to the deficient state of the proposed amended statement of claim and noting that the plaintiffs have now had a number of attempts to commence this action, Gleeson CJ's remarks in Trau v University of Sydney (1989) 34 IR 466 at 475 are apt; namely that the plaintiffs' continuing difficulty to formulate their case is likely "a very good indication that there is no cause of action", I would not have gone so far as to draw a conclusion of the kind indicated in Trau because it seems to me that this is not a case where the plaintiffs have had numerous attempts to put forward a pleading properly articulating their claim(s) and have failed to do so; rather, the position seems to have been that (as the plaintiffs' submissions make clear, though inconsistently with what was indicated at an earlier time in the online court) the plaintiffs have not until very recently sought to prepare a pleading setting out the claims that they want to prosecute at trial - and have simply filed a "holding" statement of claim in the first place.
That said, I do not accept the principal premise on which the temporary stay application is put (namely that the plaintiffs are not in a position to plead their claims until the outcome of the costs reference is known). It seems to me that the plaintiffs are in no different position than many parties who file pleadings based on the contingency that certain outcomes will follow from impugned conduct. Nor do I consider that it would be impossible to make such allegations without trespassing on the jurisdiction of the District Court.
While ordinarily I would be minded (if a pleading is struck out for pleading deficiencies) to afford an opportunity to replead, in essence the plaintiffs have already had that opportunity (having served the proposed amended statement of claim after the original statement of claim was struck out) and even now they maintain that they are not in a position to replead (so that giving them an opportunity, which they do not seek, would surely be futile).
The real issue, to my mind, is therefore whether it is an abuse of process to permit the proceedings to remain on foot (but temporarily stayed) in all the circumstances.
In UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45 (UBS v Tyne), the plurality (Kiefel CJ, Bell and Keane JJ) opened by observing that the varied circumstances in which the use of the court's processes will amount to an abuse do not lend themselves to exhaustive statement ([1]). Gageler J in that case (at [62]), agreeing in the result, noted that the doctrine of abuse of process is informed by considerations of finality and fairness (see Tomlinson v Ramsey Food Proceesing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 at [21]).
One of the circumstances in which there will be an abuse of process is where the continuance of proceedings will bring the administration of justice into disrepute (see UBS v Tyne at [44]).
There are public interest considerations underlying the power of courts to stay or dismiss proceedings for abuse of process - to prevent the waste of judicial resources and their use for purposes unrelated to the determination of genuine disputes, to maintain confidence in, and respect for, the authority of the courts.
In the present case, one of the bases on which the summary dismissal or permanent stay orders are sought is that the proceeding involves the re-litigation of issues already heard and determined (in relation to the personal costs orders) (see Lord Halsbury LC in Reichel v Magrath (1889) 14 App Cas 665 at 668; Tiufino v Warland (2000) 50 NSWLR 104; [2000] NSWCA 110 at [50] (Handley JA, with whom Powell JA and Mason P agreed); Rippon v Chilcotin). In Walton v Gardiner, Mason CJ, Deane and Dawson JJ observed (at 393) that: ... proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings. …
In State Bank of New South Wales Ltd v Stenhouse Ltd [1997] Aust Torts Reports 81-423, Giles CJ identified the following matters relevant to determining whether a proceeding is an abuse of process on the re-litigation ground: the importance of the issue in and to the earlier proceedings, including whether it is an evidentiary issue or an ultimate issue; the opportunity available and taken to fully litigate the issue; the terms and finality of the finding as to the issue; the identity between the relevant issues in the two proceedings; any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings; all part of the extent of the oppression and unfairness to the other party if the issue is relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process.
As to this, I have noted above that the plaintiffs maintain that the proceeding they wish to bring does not impermissibly involve the re-litigation of issues already determined, on the basis that what they are seeking is in fact to have the earlier judgments set aside as being based upon fraud. (There was also some debate as to whether particular issues relating to the Young v King litigation had been before the relevant courts - see T 147.29-31; T 147.47-50). It is unnecessary here to enter into this debate because the basis on which I am proposing to grant the primary relief sought by the defendants is not the re-litigation complaint.
Another basis on which the relief is sought by the defendants relates to the assertion that some or all of the claims made (against the barristers and solicitors) are not maintainable having regard to the principles of advocates or witness immunity. Again, it is unnecessary to enter into debate as to the scope or applicability of the principles of such immunity (on which the High Court has opined in, for example, the Attwells decision), because again this is not the basis on which I propose to grant the relief sought.
As to the complaint that the proposed amended statement of claim discloses no reasonable cause of action, there is force in the complaint that the pleading deficiencies are such that no reasonable cause of action is disclosed against one or more of the defendants, though I note the high threshold to be satisfied in determining summarily to dismiss proceedings on such a basis (see General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69 at 129 (Barwick CJ) (General Steel); Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] HCA 1 at 91 (Dixon J, as his Honour then was); and the discussion in Smith v Australian Executor Trustees Ltd; Creighton v Australian Executor Trustees Ltd [2017] NSWSC 1406 at [68]-[69]).
Ultimately, the basis on which (even if other of the above bases might otherwise have been available) I consider it appropriate summarily to dismiss the proceedings is that I consider it an abuse of process to make such serious allegations (of fraudulent and criminal conduct) without a proper pleading and then to seek for those proceedings to remain in abeyance for an indefinite period of time.
In my opinion, the stay of the present proceedings until completion of the costs reference (in effect for an unknown period, which would permit further time for the plaintifis to seek to "unravel" the conspiracy or to discover new evidence or to confirm their existing suspicions or conspiracy theories) while leaving on foot the very serious (and deficiently pleaded) allegations of criminal conduct and fraud against a raft of disparate groups of defendants would be unjustifiably oppressive to those defendants and would bring the administration of justice into disrepute.
I accept that this is not necessarily a case (as in Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256; [2006] HCA 27 (Batistatos)) where the lengthy delay of proceedings would make the fair trial of the claim impossible (though it is quite some time since the events complained of and I note the observations of the High Court in Jackamarra v Krakouer at [29] and McHugh J in Brisbane South Regional Health, on the question of delay, at 552-553, as to what might be referred to as presumptive prejudice from delay). Nor is this a case where the proeedings of one court have been invoked to litigate claims made but discontinued in earlier proceedings (as was the case in UBS v Tyne) although there is a very real sense in which the claims that the plainitffs wish now to advance (or to advance in the contemplated further proceedings) will include allegations that have been advanced (if not in each case determined) in other proceedings (such as those relating to the Young v King litigation) and the matters that would require, and to some extent invevitably involve, the exporation, if not indeed the re-litigation, of matters already determined (such as the wasted costs liability findings).
However, the impact of delay and the prejudice to the defendants of the proceedings remaining on foot cannot be discounted. Just as McHugh J in Brisbane South Regional Health made reference to the rationales for the existence of limitation periods (in the context of the discretion to extend time), it is relevant to note that similar rationales must underlie the provisions of the rules which identify when a statement of claim that has been filed but not served will become stale; and the overriding statutory mandate for the just, quick and cheap resolution of the real issues in dispute (s 56 of the Civil Procedure Act). It is not consistent with those rationales or principles for litigation to be commenced with the (admitted) intention of avoiding a limitations problem but then leaving the conduct of the proceeding in abeyance.
Just as it has been recognised that "it is oppressive, even 'cruel', to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed" (Brisbane South Regional Health at 552-553 (McHugh J)), it is also oppressive (and cruel) to make serious allegations of criminal conduct (including suborning perjury and the like) and neither plead those allegations properly nor make any attempt to prosecute the claims expeditiously (or at all).
This enlivens the power of the Court to stay proceedings which amount to an abuse of process so as to safeguard the administration of justice, to protect the integrity of the Court's process and to prevent serious and unjustified prejudice or harassment (see Rogers v The Queen (1994) 181 CLR 251; [1994] HCA 42 at 286; Ridgeway v The Queen (1995) 184 CLR 19; [1995] HCA 66 at 74-75; Batistatos at [9]-[16]).
Balancing the oppression to the defendants against the prejudice to the plaintiffs of the present proceeding being dismissed, the former substantially outweighs the latter in circumstances where the claim is one based on fraud and hence the concern as to the spectre of a limitations problem seems more imagined than real.
As to the alternative basis, of dismissal for want of prosecution, again the overriding purpose mandated by s 56 of the Civil Procedure Act is relevant (see Hobbs v Australian Securities and Investments Commission [2013] NSWCA 432 at [52] (Barrett JA)). However, at this stage I would not have considered the delay to be sufficient to warrant dismissal on this ground (particularly when there is an explanation put forward for the delay - as unsatisfactory as I consider that explanation to be) particularly having regard to the great care that it is recognised must be exercised . Finally, I have had regard to the principles applicable to an application for summary dismissal as summarised by Gleeson JA (with whom Beazley P, as Her Excellency then was, and Barrett JA agreed) in Simmons v NSW Trustee and Guardian [2014] NSWCA 405 at [196]-[200], there noting the "great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his cause by the appointed tribunal" quoting Barcwick CJ in General Steel at 130; and Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57] (Gaudron, McHugh, Gummow and Hayne JJ).
Had I approached the matter solely on the question of delay I would have been minded to make orders requiring a proper amended pleading to be served within a short period of time before making any order to dismiss for want of prosecution. As it is, however, I consider that permitting a temporary stay of the proceedings (and thus leaving in abeyance the very serious allegations that have been made) would be to facilitate an abuse of process and would bring the administration of justice into disrepute.
Finally, as to the submission that I should make an order declaring the plaintiffs as vexatious litigants, I do not consider this to be appropriate.
Section 8 of the Vexatious Proceedings Act identifies the circumstances in which a court is empowered to make a vexatious proceedings order, providing relevantly that: (1) When orders may be made An authorised court may make an order under this section (a vexatious proceedings order) in relation to a person if the court is satisfied that: (a) the person has frequently instituted or conducted vexatious proceedings in Australia, or (b) the person, acting in concert with a person who is subject to a vexatious proceedings order or who is referred to in paragraph (a), has instituted or conducted vexatious proceedings in Australia. … (4) Orders may be made on court's own motion or on application An authorised court may make a vexatious proceedings order of its own motion or on the application of any of the following persons: (a) the Attorney General, (b) the Solicitor General, (c) the appropriate registrar for the court, (d) a person against or in relation to whom another person has instituted or conducted vexatious proceedings, (e) a person who, in the opinion of the court, has a sufficient interest in the matter. … (6) A judicial officer, member or registrar of a court or tribunal may make a recommendation to the Attorney General that he or she consider making an application for a vexatious proceedings order in relation to a specified person. (7) Orders that may be made by Supreme Court The Supreme Court may make any one or more of the following vexatious proceedings orders in relation to a person: (a) an order staying all or part of any proceedings in New South Wales already instituted by the person, (b) an order prohibiting the person from instituting proceedings in New South Wales, (c) any other order that the Court considers appropriate in relation to the person.
"Vexatious proceedings" are defined by s 6 to include: (a) proceedings that are an abuse of process of a court or tribunal; and (b) proceedings instituted to harass or annoy, to cause delay or detriment, or for another wrongful purpose; and (c) proceedings instituted or pursued without reasonable ground; and (d) proceedings that are conducted to achieve a wrongful purpose, or in a way that harasses, or causes unreasonable annoyance, delay or detriment, regardless of the subjective intention or motive of the person who instituted the proceedings.
Although the definition in s 6 is not expressed to be exclusive, Basten JA in Viavattene v Attorney-General (NSW) [2015] NSWCA 44 (Viavattene v Attorney-General) at [14] concluded that it would be rare for a court to treat proceedings as vexatious unless they could be fairly characterised as falling under one of the descriptions in s 6. On the differences in meaning as between the descriptions in s 6, his Honour concluded at [18] that the only significant difference between the paragraphs is that the former deals with the institution of proceedings and the latter their conduct.
The making of a vexatious proceedings order is a serious remedy that forecloses the person the subject of such an order from access to the Court (and thereby to justice) unless leave is granted to institute proceedings (s 14). Both the legislative framework and judicial exegesis on the touchstone of "vexatiousness" place emphasis on annoyance, harassment, hopelessness, groundlessness or untenability. In assessing whether a given person has instituted or conducted vexatious proceedings in Australia the totality of their behaviour, across various courts and jurisdictions, is to be examined. Whether that conduct is sufficiently "frequent" is to be assessed in context.
The legal principles relevant to the declaration of vexatious litigants were summarised in Attorney-General for the State of Victoria v Weston [2004] VSC 314. Although Weston deals with the regime pursuant to s 21 of the Supreme Court Act 1986 (Vic), it has been cited frequently in several jurisdictions (see, for example Attorney General (NSW) v Klewer (No 3) (2010) 264 ALR 535; [2010] NSWSC 9 (Attorney General v Klewer)). In Weston, Whelan J held as follows: 23. It seems to me that the applicable legal principles may be summarised as follows: (1) The application seeks a remedy of a most serious nature and a clear and compelling case must be shown to warrant it. (2) The requirements of the section are that the person must have instituted proceedings which are vexatious and to have done so habitually and persistently and without reasonable cause. (3) If the requirements are met, the Court must then consider whether an order ought to be made. (4) A proceeding is 'instituted' where originating process is filed, and also where a person counterclaims, appeals against an otherwise final determination of the substantive matter, or applies to have an otherwise final determination set aside. Interlocutory applications and appeals on interlocutory applications do not ordinarily constitute the institution of proceedings. (5) Vexatious proceedings are proceedings which have either been brought for an improper purpose, or which have been revealed to be hopeless. Hopelessness ought to be apparent from the ultimate disposition. A genuine claim, or element of a claim, may exist within a vexatious proceeding, where it is deeply buried in untenable claims and bizarre allegations. (6) Vexatious proceedings are instituted 'habitually' where they appear to be commenced as a matter of course. 'Persistence' suggests determination and an element of stubbornness. An absence of reasonable grounds will necessarily be the position where the proceedings have been revealed to be hopeless. (7) If the requirements of the section are met, the person's conduct as a whole must be then assessed to determine if, in all the circumstances, an order ought to be made.
Dealing with the former s 84 of the Supreme Court Act 1970 (NSW), Roden J in Attorney-General (NSW) v Wentworth (1988) 14 NSWLR 481 at 484 described the nature of the remedy as extreme, noting that in R De W Kennedy (Finance) Pty Ltd v Ley (Holland J, 29 March 1978, unreported), Holland J referred to this as the "most drastic" of the powers of the court to control litigation and litigants and said that "this denies to such a litigant a right that all other citizens have, namely, to call upon the Court to adjudicate a claim simply by making it in Court in the prescribed manner".
As to the meaning of "vexatious", Roden J said at 487 that the relevant vexation "cannot be found simply in the habitual or persistent manner in which legal proceedings are instituted, in a lack of reasonable ground for their institution, or in a combination of factors"; that something more would be required. Similarly, his Honour considered that the use of the words "without any reasonable ground" implied that it would be possible to institute vexatious legal proceedings "and indeed to do so habitually and persistently, with reasonable ground". His Honour there referred to the definition of vexatious actions in the Oxford Companion to Law (1980), as "[a]ctions brought, not bona fide, but brought to annoy or embarrass the other party or not likely to lead to any practical result".
Harrison J defined "vexatious" in Attorney General v Klewer at [275] as follows: Proceedings are vexatious if they are either instituted with the intention of annoying or embarrassing the person against whom they are brought, are brought for collateral purposes, and not the purpose of having the court adjudicate on the issues to which they give rise or, irrespective of the motive of the litigant, are so obviously untenable or manifestly groundless as to be utterly hopeless. The collateral purpose need not refer to the sole purpose, but merely to a purpose for which the proceedings were brought and for which they should not have been commenced: see Donnelly v Capricornia Prospecting Pty Ltd [1999] NSWLEC 39; (1999) 102 LGERA 310 and the cases cited at 322. Litigation is vexatious if it is brought for collateral or ulterior purposes, or if it is not a bona fide attempt to have the questions in dispute adjudicated: Attorney-General for New South Wales v Solomon (1987) 8 NSWLR 667 at 674.
In Attorney-General for the State of Victoria v Horvath, Senior [2001] VSC 269 at [28] the Court said, in relation to the Victorian equivalent of s 8: It is one thing to know what the word "vexatious" means. It is another thing to apply s 21(2) to the circumstances of a particular case. In the latter task the following matters are, according to the authorities, relevant: first, where an order has been made dismissing an action as frivolous or vexatious, or striking a pleading out, it is not for a court considering a s 21 application to go behind the order and go into the merits of the argument as a court of appeal would do. Second, findings which are required do not depend on viva voce evidence or credibility of witnesses. The critical evidence is to be found in court files - documents, judgments, orders and reasons. For that reason, any hearsay material contained in an affidavit in support of an application, even though objectionable, should be treated simply as a distraction, and ignored. … Fourth, and this is a more general proposition with respect to s 21, in determining whether the Attorney-General has made out a case, the court is not concerned with a minute individual examination of each proceeding. It must consider the overall impression created by the number of proceedings, their general character and their results.
As to the meaning of "frequently", as a jurisdictional precondition to the making of an order under s 8 of the Vexatious Proceedings Act, in Potier v Attorney-General (NSW) (2015) 89 NSWLR 284; [2015] NSWCA 129 at [114], Leeming JA considered that the word turns on its context, and that it was not possible to formulate a precise test. His Honour noted (at [115]) that the change in language from the predecessor provision in s 84 of the Supreme Court Act 1970 (NSW) from "habitually and persistently" to "frequently" was a deliberate lowering of the threshold condition. At [116], his Honour observed that "there are vexatious proceedings and there are vexatious proceedings"; considering that the quality of the vexatiousness of a proceeding, and the nature of the proceeding itself, inform the assessment of frequency. Citing Viavattene v Attorney-General (NSW) [2015] NSWCA 44 at [49], his Honour noted that "[t]he issue posed by the statutory term 'frequently' is not to be assessed merely by an arithmetic calculation".
In the present case, I am concerned that Mr Muritini (though represented at the hearing of the applications by Mr Newell) might well have a different position in relation to such a claim; and neither of the plaintiffs really dealt with that issue in their submissions. However, I am also concerned by the history of proceedings in which serious allegations of conspiracy and fraud have been made and the conduct of the plaintiffs in that regard has been the subject of much criticism; and yet the plaintiffs are clearly contemplating yet further proceedings raising the same kind of conspiracy issues that were raised in the Young v Hones litigation (but apparently this time linking that in some unidentified way to the conspiracy here alleged in relation to the De Costi proceedings). It is undeniable that the Court's resources have been burdened, and the parties have incurred significant costs, in the proliferation of conspiracy allegations of the kind here made.
In all the circumstances, I have given careful consideration as to referring the matter to the Attorney-General for his consideration as to whether an application for such a declaration should be brought. That would give the plaintiffs (if such an application were to be brought) the proper opportunity to defend the application. In light of the above mentioned further proceeding which it is apparently envisaged will raise again the conspiracy allegations the subject of the Young v Hones ligitation, I consider it appropriate to do so.

Parties

Applicant/Plaintiff:

Muriniti

Respondent/Defendant:

Lawcover Insurance Pty Ltd

Legislation Cited (12)

Legal Profession Act 2004(NSW)

Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015(NSW)

Civil Procedure Act 2005(NSW)

Crimes Act 1900(NSW)

Insurance Contracts Act 1984(Cth)

Legal Profession Uniform Conduct (Barristers) Rules 2015(NSW)

Limitation Act 1969(NSW)

Supreme Court Act 1970(NSW)

Supreme Court Act 1986(Vic)

Surveillance Devices Act 2007(NSW)

Uniform Civil Procedure Rules 2005(NSW)rr 14.6, 14.7, 14.8, 14.14, 14.28, 15.1, 15.3, 15.4, 15.9, 19.5

Vexatious Proceedings Act 2008(NSW)ss 6, 8, 14

Cases Cited (110)

D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; [2005] HCA 12 De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 2) [2012] NSWDC 286 De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 3) [2013] NSWDC 54 De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 4) [2014] NSWDC 70 De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 5) [2015] NSWDC 8 De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 6) [2016] NSWDC 378 De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 8) [2020] NSWDC 184 Dean v American Express International, (Supreme Court (NSW), Charteris J 23 March 2007, unrep) Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] HCA 1 Dresna Pty Ltd v Misu Nominees Pty Ltd [2003] FCA 1537 Dresna Pty Ltd v Misu Nominees Pty Ltd [2004] FCAFC 169 Fatimi Pty Ltd v Bryant (2004) 59 NSWLR 678; [2004] NSWCA 140 Fatimi Pty Ltd v Bryant [2002] NSWSC 750 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69 Glover v Kaji Australia Pty Ltd [2020] NSWCA 222 Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 Hammond v State of New South Wales [2013] NSWSC 1930 Hammond v State of New South Wales [2015] NSWCA 304 Hamod v New South Wales [2011] NSWCA 375 Hobbs v Australian Securities and Investments Commission [2013] NSWCA 432 Hughes v Western Australian Cricket Association (1986) 69 ALR 660; [1986] FCA 465 Jackamarra v Krakouer (1998) 195 CLR 516; [1998] HCA 27 Jackson Lalic Lawyers Pty Ltd v Atwells [2014] NSWCA 335 Jacobsen v Jacobsen [2017] NSWSC 1590 Johnston v Smith [2002] NSWSC 409 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Kaji Australia Pty Ltd v Glover (No 4) [2019] NSWSC 1779 Kaji Australia Pty Ltd v Glover (No 5) [2020] NSWSC 1576 Krakowski v Eurolynx Properties Limited (1995) 183 CLR 563; [1995] HCA 68 Lawcover v Muriniti [2017] NSWSC 1557 Lee v Adedian [2016] QSC 92 Leerdam v Noori (2009) 255 ALR 553; [2009] NSWCA 90 McGuirk v The University of New South Wales [2009] NSWSC 1424 McWilliam v Penthouse Publications Ltd [2001] NSWCA 237 Meckiff v Simpson [1968] VR 62 Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc [1990] 1 QB 391 Muriniti v Mercia Financial Solutions Pty Ltd [2021] NSWCA 180 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; [1992] HCA 66 Newell; Muriniti v De Costi (2018) 97 NSWLR 398; [2018] NSWCA 49 Nguyen v QTQ Mechanical Services Pty Ltd [2019] NSWSC 1629 Potier v Attorney-General (NSW) (2015) 89 NSWLR 284; [2015] NSWCA 129 R De W Kennedy (Finance) Pty Ltd v Ley (Holland J, 29 March 1978, unreported) Rafailidis v Camden Council [2021] NSWSC 1087 Reichel v Magrath (1889) 14 App Cas 665 Ridgeway v The Queen (1995) 184 CLR 19; [1995] HCA 66 Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142 Rogers v The Queen (1994) 181 CLR 251; [1994] HCA 42 Simmons v NSW Trustee and Guardian [2013] NSWSC 1688 Simmons v NSW Trustee and Guardian [2014] NSWCA 405 Smith v Australian Executor Trustees Ltd; Creighton v Australian Executor Trustees Ltd [2017] NSWSC 1406 State Bank of New South Wales Ltd v Stenhouse Ltd [1997] Aust Torts Reports 81-423 Swinfen v Lord Chelmsford (1860) 5 H&N 890; 157 ER 1436 Tiufino v Warland (2000) 50 NSWLR 104; [2000] NSWCA 110 Tomlinson v Ramsey Food Proceesing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 Trau v University of Sydney (1989) 34 IR 466 UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45 Viavattene v Attorney-General (NSW) [2015] NSWCA 44 Walton v Gardiner (1993) 177 CLR 379; [1993] HCA 77 Weston v Publishing and Broadcasting Ltd (2011) 83 ACSR 206; [2011] NSWSC 433 Williamson v Elders Limited [2017] NSWSC 667 Young v Hones (No 2) [2014] NSWCA 338 Young v Hones (No 5) [2016] NSWSC 822 Young v Hones [2014] NSWCA 337 Young v Hughes Trueman Pty Ltd (No 4) [2017] FCA 456 Young v Hughes Trueman Pty Ltd [2016] FCA 1176 Young v King (No 11) 2017] NSWLEC 34 Young v King [2004] NSWLEC 93 Texts Cited: Bullen, Edward, Sir William Blair, Lord Daniel Brennan, Sir Robin Jacob and Sir Brian Langstaff, Bullen & Leake & Jacob's Precedents of Pleadings (19th ed, 2019, Sweet & Maxwell) Category: Procedural rulings Parties: Leonardo Carlo Muriniti (First Plaintiff) Robert Newell (Second Plaintiff) (Self-represented) Lawcover Insurance Pty Ltd (First Defendant) Elissa Baxter (Second Defendant) AAI Limited (formerly Suncorp) (Third Defendant) De Costi Seafoods (Holdings) Pty Ltd (Fourth Defendant) De Costi Seafoods (Franchises) Pty Ltd (Fifth Defendant) George Costi (Sixth Defendant) Androulla Costi (Seventh Defendant) Andrew Thorpe (Eighth Defendant) Stephen Stanton (Ninth Defendant) Michael Holmes (Tenth Defendant) Juliana Ng (Eleventh Defendant) David Shnider (Twelfth Defendant) Deborah Searle (Thirteenth Defendant) Philippe Doyle Gray (Fourteenth Defendant) Louise Thomson (Fifteenth Defendant) Bruce Yeldham (Sixteenth Defendant) Mary Vitalone (Seventeenth Defendant) David Lloyd (Eighteenth Defendant) Wendy Blacker (Nineteenth Defendant) Rory O'Connor (Twentieth Defendant) Geoffrey Watson (Twenty-First Defendant) Nicholas Andrew (Twenty-Second Defendant) Frank Theodore (Twenty-Third Defendant) Representation: Counsel: A Zahra SC with J Anderson (1st, 2nd, 16th, 17th Defendants) D Villa SC with D Tang (3rd and 21st Defendants) SJ Stanton (4th, 5th, 6th, 7th, 9th, 12th and 23rd Defendants) B McClintock SC with S Spiers (8th ,11th ,19th and 20th Defendants) M Fordham SC (10th Defendant) B McClintock SC (13th Defendant) E Olivier (14th Defendant) M Elliott SC (18th Defendant) C Coventry (22nd Defendant)

Cited By (11)

Arjunan v Neighbourhood Association DP No 285853

Bell Lawyers Pty Ltd v Pentelow

CEE t/as Electricity Wizard Pty Ltd (In Liq) (Receivers Appointed) v Electricity Wizard Pty Ltd

Gouros & Ors v Order of AHEPA NSW Incorporated

Hillier v Martin

McGregor v The Sydney Children's Hospitals Network; McGregor v The Sydney Children's Hospitals Network; Kenny v The Sydney Children's Hospital Network; Kenny v The Sydney Children's Hospitals Network & Ors.; Kenny v The Sydney Children's Hospitals Network & Ors.; Pagett v The Sydney Children's Hospitals Network & Ors.

Muriniti v Lawcover Insurance Pty Ltd

Judgment

HER HONOUR: Before me for hearing commencing on 7 December 2021 were various interlocutory notices of motion - a notice of motion filed on 1 April 2021 by the plaintiffs (a solicitor, Mr Leo Muriniti; and a former barrister, Mr Robert Newell, who now works as a solicitor employed as a consultant in Mr Muriniti's law firm - L.C. Muriniti and Associates, Solicitors) seeking a temporary stay of the proceeding (or in the alternative leave to file a proposed amended statement of claim); and a series of notices of motion (many of them since amended) filed by the various defendants or groups of defendants, in February and March 2021, essentially now seeking either summary dismissal or a permanent stay of the proceeding (or in the alternative a dismissal of the proceeding for want of prosecution). Somewhat ironically, therefore, both sides seek a stay of the proceeding - albeit that the plaintiffs are seeking only a temporary stay (until the outcome of a costs reference and determination of costs applications in other proceedings in the District Court) and the defendants are seeking (in most cases as an alternative to summary dismissal) a permanent stay.
The original statement of claim was struck out in November last year (in circumstances where the plaintiffs' position was that they did not intend to proceed with that pleading to trial). The remaining issues for determination on the respective motions are in essence whether the plaintiffs should be granted the temporary stay they seek or whether, as the defendants seek, the proceedings should be summarily dismissed or permanently stayed (or dismissed for want of prosection). The plaintiffs have, in the alternative to their application for a temporary stay, sought leave to file an amended statement of claim but they make no bones about the fact that the draft amended statement of claim served by them shortly before the hearing of the motions is not the pleading that they wish or intend to prosecute at trial.
There was some debate during the hearing of the notices of motion as to whether, if the defendants' applications were to succeed, the appropriate order was for summary dismissal or permanent stay, but ultimately it was not suggested that there was any relevant difference.
For the reasons set out below, I am of the view that the plaintiffs' notice of motion should be dismissed with costs; and that the proceedings should be summarily dismissed again with costs. I see no proper basis on which to give leave for the filing of the proposed amended statement of claim which the plaintiffs themselves acknowledge is not the pleading they wish to take to hearing (leaving aside the manifest deficiencies of the proposed amended statement of claim); and I do not consider it consistent with the overriding statutory purpose mandated by s 56(1) of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) nor with the proper administration of justice to grant a temporary stay (for an indefinite period - since the time for completion of the costs reference on which the stay is predicated is uncertain) of proceedings in which very serious allegations of fraud and criminal conduct are made (and which are not properly pleaded or sufficiently particularised).
The continuation (albeit temporarily stayed) of the proceedings in all the circumstances would in my view amount to an abuse of process, bringing the administration of justice into disrepute; and calls to mind the observation by McHugh J (albeit in a different context, namely the extension of a limitation period) in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25 (Brisbane South Regional Health Authority) at 552 that it is "oppressive, even 'cruel', to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed". Here, it seems to me equally oppressive for the many legal practitioners who have been joined as defendants to have such serious (and, again, inadequately pleaded and particularised) allegations hanging over their heads (relating to conduct allegedly occurring many years ago) for some indeterminate time in order to permit the plaintiffs effectively to await (or search for) evidence to support their conspiracy allegations (and perhaps seek further to "unravel" this or other conspiracies).
Moreover, I do not see that the plaintiffs are prejudiced by the summary dismissal of the proceedings, given the fact that the claims they wish to make are claims of fraud, in respect of which s 55(1) of the Limitation Act 1969 (NSW), extracted in due course below, would, on the plaintiffs' own case, surely apply.

The Alleged Conspiracy

I address in due course various of the allegations made in the proposed amended statement of claim (which I refer to as such even though, as noted, the plaintiffs do not in fact intend to proceed with this form of pleading). Suffice it at this stage to note that the nub of the plaintiffs' claims is that there was an unlawful conspiracy to injure the plaintiffs (by use of unlawful means). That conspiracy in simple terms (and I here paraphrase) was an elaborate plan (involving a raft of alleged conspirators) to put forward baseless or manifestly hopeless personal costs applications in what I refer to as the De Costi proceedings in the District Court against the plaintiffs, or, depending on the role of the alleged conspirators, to prosecute those applications ineptly, in order to bring about a position whereby there would be personal costs orders made against the plaintiffs, so as to provide the plaintiffs' respective professional indemnity insurers (in the case of Mr Newell) to decline to renew his professional indemnity insurance or the relevant policy or (in the case of Mr Muriniti) to increase premiums payable on renewal of his professional indemnity insurance, with the object or purpose of preventing or dissuading the plaintiffs from continuing to act for a particular client (Mrs Young) in separate proceedings (now disposed of) arising out of a neighbourhood drainage dispute with which many of the defendants have had no involvement or connection (and with the "ultimate purpose" of perverting the course of justice by denying the District Court knowledge of the true circumstances of the costs applications against the plaintiffs and by denying Mrs Young legal representation by the plaintiffs thus impeding the conduct of Court proceedings by her).
When faced with the rhetorical question (posed in different forms by various of the defendants) as to what possible interest the alleged conspirators would have in achieving such an objective (those alleged conspirators including professional indemnity insurers who, on the plaintiffs' case, were in effect acting to promote claims for which the insurers would themselves be liable, and legal practitioners, of varying degrees of experience and with varying degrees of involvement in the relevant matter(s) who, again on the plaintiffs' case, were acting against their own clients' interests in a criminal conspiracy), the plaintiffs' answer (having on their own account spent much time and cost seeking to "unravel" the conspiracy) seems to be that this was in order to conceal other fraudulent or improper conduct coming to light. The convoluted nature of the conspiracy claim is thus evident at the outset.
I should note that the relevance of the many rhetorical questions posed by the defendants is explicable by reference to the observation by Lee J in Young v Hughes Trueman Pty Ltd (No 4) [2017] FCA 456 (Young v Hughes Trueman (No 4)) at [51], in relation to a case in which the plaintiffs had appeared for Mrs Young, that: This is the central problem that confronts the Solicitors and has confronted them whenever the conspiracy has been examined in Court. There is nothing whatever that is pointed to by way of evidence to suggest that there is not an equally plausible explanation for the actions of each of the alleged co-conspirators. Indeed, here one can go much further than merely pointing to an available hypothesis consistent with the non-existence of a conspiracy: in the present circumstances, even assuming a wrong was caused, the type and motivations of the inferred agreement are so singular and so contrary to ordinary experience that any legal practitioner acting reasonably would conclude that there are a number of explanations (including inadvertence or negligence) which are plainly much more probable. Whatever the perceived deficiencies or shortcomings of the actions of one or other of the actors, how can it be reasonably said that anyone was acting in a way that did not have an apparent legitimate purpose, let alone that all persons were acting in concert and illegitimately?
The various professional indemnity insurers and legal practitioners make the very same argument here.
Unfortunately (for all concerned), this appears to be another instance of the kind described by Bromwich J in an earlier judgment in the case involving Mrs Young (Young v Hughes Trueman Pty Ltd [2016] FCA 1176 (Young v Hughes Trueman) at [41] as "reverse engineering"; his Honour saying that what the plaintiffs appeared there to be doing was to assert (and then would presumably be seeking to prove) "the existence of a conspiracy by reverse engineering the existence of that conspiracy as being the only explanation [for the disparity that was the focus of the conspiracy allegations in that case]". (The disparity to which his Honour there referred related to plans in respect of an engineering outcome to rectify unauthorised building works, as to which the proposed amended statement of claim here again makes reference.)
The logic underlying the present conspiracy claims seems to be along the same lines - in the case of Mr Newell, for example, that: the refusal to renew his professional indemnity insurance has caused him substantial prejudice (in that he has been unable to continue to practise as a barrister - now for some 7 years); there must have been a sinister reason for this (i.e., it could not have been for the seemingly plausible reason that the insurer might, in its exercise of assessing insurance risk, have decided, in view of numerous claims against Mr Newell, referrals of complaints about Mr Newell to the Legal Services Commissioner, and criticism by various judges of Mr Newell's conduct of litigation, not to renew the policy); that the reason must have been to prevent or dissuade him from acting for Mrs Young, with the objective of perverting the course of justice and misleading the court (even though many of the alleged conspirators had nothing to do with Mrs Young's litigation and some are said to have "joined" the conspiracy after relevant events relating to it); and that the means by which that objective was sought to be achieved must have involved the bringing of personal costs applications that were manifestly hopeless and prosecuted in a way that would cause them to fail (even though Mr Newell had a measure of success in defending those costs applications and appealing from adverse orders in relation thereto, with the assistance of some of the very persons alleged to be involved in the conspiracy).
However, Mr Newell in oral submissions appeared adamant that there could be no innocent explanation for the impugned conduct by a disparate group of entities and individuals; and he is seemingly reinforced in that conclusion by an alleged conversation (not apparently hitherto raised and which I am told will be contested) between members of only one of the groups of alleged conspirators, in which it is said that a threat was made in effect to cause him to lose his insurance cover (see [79] of the proposed amended statement of claim).

At a glance

Court

Decision date

Before

Source

Judgment (53 paragraphs)

Parties

Legislation Cited (12)

Cases Cited (110)

Cited By (11)