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[2014] NSWSC 1386
Supreme Court of NSW
2014-09-23
Schmidt J
Original judgment source is linked above.
Judgment 1By summons filed in November 2013, Mr O'Connor sought orders designed to permit him to pursue his application for an assessment of legal costs after the applicable 12 month period. Section 350 of the Legal Profession Act 2004 (NSW) permits the Court to make such an order, if it "determines, after having regard to the delay and the reasons for the delay, that it is just and fair for the application for assessment to be dealt with after the 12-month period". 2Mr O'Connor obtained the order which he sought on 5 February 2014, when orders were made in his favour by consent. He did not avail himself of that opportunity or the opportunity to pursue a costs order. In March the proceedings were finally dismissed. By motion filed in August 2014, he seeks to set aside the earlier orders, so that he can pursue a further opportunity to apply for an assessment of his legal costs. 3That application is opposed by the defendants, Mr O'Connor's former solicitors. Their position was that the Court has no power to vacate the orders made by the Registrar on 5 February in Mr O'Connor's presence, granting him leave to bring an assessment application by 5 March 2014 and dismissing his summons other than as to costs; that the Court's discretion to set aside the further order made on 24 March dismissing the balance of the proceedings would not, in the circumstances, be exercised; and the orders sought in relation to the costs assessment would not be made. 4Mr O'Connor's motion was supported by affidavits sworn by he and his wife in August 2014. He was legally represented in the proceedings at one point, but in September 2014 his former solicitor filed a notice of removal. He appeared unrepresented at the hearing. 5The defendants relied on an affidavit sworn by Ms Perry. At the hearing, Mr O'Connor did not object to Ms Perry's affidavit being received, but alleged that it had not been properly executed. That allegation rested on his perception that the signature of the witness differed from that on another affidavit Ms Perry had sworn before that witness. The allegation was plainly a serious one, but its consequences, from Mr O'Connor's point of view were not readily apparent. It could, in any event, not be made out on a bare comparison of the two signatures he relied on. 6Mr O'Connor deposed that he had instructed Ms Perry to send letters of demand in two legal disputes in which he was involved. He signed a costs agreement and invoices for the work performed were later provided to him. He considered the costs charged to have been grossly out of proportion to the work performed and made no payment. Proceedings were brought against him in the Local Court in June 2013 in which a default judgment has been entered in an amount of $30,804.91 and an examination procedure is on foot. 7Mr O'Connor explained that he had commenced these proceedings, after obtaining assistance from the Newcastle University Legal Service. On 5 February 2014, he appeared before the Registrar. He was provided with a copy of proposed consent orders, which he refused to sign, in the following terms: "1 Pursuant to s.350 of the Legal Profession Act 2004, leave is granted to the Plaintiff to apply for assessment of the Defendant's costs, such application to be made by 5 March 2014. 2 The Summons is otherwise dismissed. 3 Make no order as to the costs of these proceedings." 8After hearing the parties the Registrar ordered: "1. Defendant to file and serve all affidavit material on which intend to rely in respect of the issue of costs by 19/2/14. 2. Plaintiff to file and serve any affidavit in reply by 12/3/14. 3. List for costs argument on 24/3/14 at 11am. 4. Orders 1-2 in SMO: By consent and without admission of liability, the Court orders that: (1) Pursuant to s.350 of the Legal Profession Act 2004, leave is granted to the plaintiff to apply for assessment of the defendant's costs, such application to be made by 5/3/14. (2) The Summons is otherwise dismissed." 9Mr O'Connor deposed that he had struggled to follow what had occurred at the 5 February hearing; that he had not made proper notes; that afterwards he had looked for a Court employee to tell him what orders had been made, but could find no-one; and that he thought the Court would later forward him a copy of the orders made. While he knew that he had been granted leave to seek a costs assessment, he did not know that a timetable had been imposed, which he had to adhere to. 10Mr O'Connor also deposed that he was not aware of the date to which the matter had been adjourned for argument as to the costs of the summons. He was then distracted with work and in mid-March asked his wife to call the Court. She told him that the defendants had not filed anything and there was no need for him to appear. 11Mrs O'Connor affidavit was difficult to follow. She deposed that: "2. I recall that my husband was in dispute with the defendants with respect to some legal costs. I was aware that he attended the Supreme Court in Sydney on a couple of occasions in relation to this matter. Insofar as I am aware, he had never been involved in any Supreme Court proceedings or proceedings of this nature. I recall he said to me sometime in the middle of March words to the effect of "we have got a Court date coming up you need to find out what we have to do". 3. A short time thereafter, I rang the Supreme Court Registry in Sydney. I spoke to a person whose name I did not obtain and I said to that person words to the effect of I have telephoned the Court for you. They said that the defendants didn't file anything and so you do not need to appear when the matter is next in court". 12Mr O'Connor did not appear at the hearing on 24 March, on his case because of the confusing terms of the orders made on 5 February and because the defendants filed no evidence to support their case, as the orders made on 5 February contemplated. On 24 March, in his absence, the Registrar ordered: "No Order. Note Order 2 made 5.02.2014, summons were dismissed. Close File." 13Ms Perry deposed that Mr O'Connor had made a complaint about her to the Legal Services Commissioner. After she was advised that it had been dismissed, she then pursued the outstanding costs in the Local Court. In October 2013, the Local Court proceedings were adjourned, so that Mr O'Connor could bring an application in this Court, for leave to have his costs assessed. He obtained that leave by consent in February 2014, but did not pursue any costs assessment. After these proceedings were later dismissed in March 2014, Ms Perry pursued her application in the Local Court. Mr O'Connor did not appear and default judgment was entered in the defendants' favour in July 2014. This motion was brought in August 2014. 14Mr O'Connor did not explain why he did not appear in the Local Court proceedings which Ms Perry pursued. It was only after he was served with an examination notice that he contacted the Court's registry by email, advising: "I have not attended the hearing on 24 march 2014 I was not notified of the hearing date and seek to find out what is my next step" 15On 9 July he was advised by the Court that his summons had been dismissed and the case closed; that he had a right to seek a review of the Registrar's decision, but that a 28 day time limit applied and that: "It is the responsibility of the parties to attend directions hearings and be aware of the dates listed for further directions. The Court does not notify parties of upcoming directions and hearing dates." 16Ms Perry deposed that Mr O'Connor then applied to the Local Court to have the default judgment set aside. That application has been adjourned, pending resolution of this motion.
The Court's powers 17By the orders made on 5 February in his presence, Mr O'Connor was given leave, by consent, to bring a costs assessment application by 5 March. His summons was dismissed other than as to costs. The costs application was listed for hearing on 24 March. He did not put on any evidence and he did not appear, with the result that the proceedings were then finally dismissed. 18As discussed in Deputy Commissioner of Taxation v Meredith (No 2) [2008] NSWCA 133; 75 NSWLR 462 at [6] - [7], the general position is that once an order disposing of proceedings is entered, it is beyond the Court's recall. Provisions made in the Uniform Civil Procedure Rules 2005 (NSW) provide certain exceptions to that general position. 19The application to vacate the Registrar's orders is thus governed by provisions made in r 36.15 and r 36.16 which provide: "36.15 General power to set aside judgment or order (cf DCR Part 13, rule 1, Part 31, rule 12A; LCR Part 11, rule 1, Part 26, rule 3) (1) A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith. (2) A judgment or order of the court in any proceedings may be set aside by order of the court if the parties to the proceedings consent. 36.16 Further power to set aside or vary judgment or order (cf SCR Part 40, rule 9) (1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order. (2) The court may set aside or vary a judgment or order after it has been entered if: (a) it is a default judgment (other than a default judgment given in open court), or (b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order, or (c) in the case of proceedings for possession of land, it has been given or made in the absence of a person whom the court has ordered to be added as a defendant, whether or not the absent person had notice of the relevant hearing or of the application for the judgment or order. (3) In addition to its powers under subrules (1) and (2), the court may set aside or vary any judgment or order except so far as it: (a) determines any claim for relief, or determines any question (whether of fact or law or both) arising on any claim for relief, or (b) dismisses proceedings, or dismisses proceedings so far as concerns the whole or any part of any claim for relief. (3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered. (3B) Within 14 days after a judgment or order is entered, the court may of its own motion set aside or vary the judgment or order as if the judgment or order had not been entered. (3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B). (4) Nothing in this rule affects any other power of the court to set aside or vary a judgment or order." 20The Court's powers must also be exercised in accordance with the objects provided in s 56 of the Civil Procedure Act 2005 (NSW), the just, quick and cheap resolution of the real issues in the proceedings. Consideration of matters such as the timely disposal of proceedings at an affordable cost (s 57); the degree of difficulty or complexity to which the issues in the proceedings give rise and what the dictates of justice require (s 58); elimination of delay (s 59); and proportionality of costs (s 60) must also all be borne in mind.
The 5 February 2014 orders 21At the hearing Mr O'Connor explained that his real concern was with the orders made on 5 February. Unless they were set aside, he could not achieve his aim, namely of having the disputed costs assessed. He was given the opportunity to make written submissions in relation to the operation of the Rules on which the defendants relied to oppose his case, which he availed himself of. Those submissions did not advance his case. 22Rule 36.15 has no application to the orders made on 5 February, given that they were made in Mr O'Connor's presence, he not having shown that they were given or entered irregularly, illegally or against good faith. To the contrary, they were plainly for his benefit, giving him the opportunity he had sought to pursue a costs assessment. All that remained to be dealt with at that point was the costs of the proceedings. 23Even if there was a discretion to exercise in Mr O'Connor's favour, a basis for its exercise has not been established. He heard the relatively simple and clear orders which were made on 5 February, having refused to agree to the orders which the defendants were proposing as to costs. If he truly then had any doubts as to the terms of those orders and the opportunities he was thereby being given - firstly, to pursue the costs assessment he sought and secondly, to be heard on the question of the costs of the proceedings he had brought - he could have made enquiries at the Registry that day. That he could that day find no Court employee to make an enquiry of, is simply implausible. 24That he failed to pursue either the costs assessment or the costs of these proceedings because he was waiting in the expectation that the Court would send him a copy of the orders made on 5 February, as he now claims, is also difficult to credit. He certainly never made an enquiry as to the whereabouts of the orders which he now claims that he expected the Court would send him. 25Mr O'Connor had Mrs O'Connor make an enquiry of the Registry in March in relation to the hearing date of the costs application, but made no attempt to pursue either an application for costs assessment or an order for the costs of the proceedings. Both applications lay entirely within his hands. The costs hearing did not depend on the defendants filing evidence. It was a matter for Mr O'Connor to file and serve the evidence he wished to rely on and to appear to press his costs application at the hearing in March. 26Mr O'Connor took no further steps at all to advance his interests in relation to the costs assessment, these proceedings or the Local Court proceedings, until examination orders were made against him in the Local Court. Mr O'Connor advanced no explanation for his failure to appear in those proceedings. 27It was only service of the examination order in the Local Court which prompted him to make any enquiry as to the terms of the orders made in these proceedings. In the result, Mr O'Connor has never pursued a costs assessment, despite the opportunity granted to him in these proceedings. 28In those circumstances, there is simply no basis upon which the orders made on 5 February can be set aside, given the terms of r 36.15. 29Further, r 36.16 is of no assistance to Mr O'Connor. This application was made after entry of the 5 February orders and so Rule 36.16(1) has no application. Rule 36.16(2) also provides no basis for the order sought, the 5 February orders having been made in Mr O'Connor's presence. Further, Mr O'Connor's August motion was not filed within 14 days of the making of the disputed orders, a time limit which the Court has no power to extend. 30In the result this order must be refused.
24 March 2014 orders 31In his written submissions Mr O'Connor said that the Court records which indicated that he did not appear at the hearing on 23 March were incorrect. That submission was inconsistent with the Court record, with what Ms Perry had deposed to and even with the case which Mr O'Connor had himself advanced at the earlier hearing. There is, I am satisfied, no doubt that he did not appear that day. 32Mr O'Connor's absence at the hearing, of itself, is not alone a proper basis for making an order in his favour under r 36.16. As Barrett JA discussed in Northey v Bega Valley Shire Council [2012] NSWCA 28 at [13]: "There must be some added factor that makes it unjust for the order to stand." 33That his misunderstanding of the hearing date and his need to appear was as Mr O'Connor submitted it to have been was undermined by Mrs O'Connor's evidence, which makes clear he was aware that a hearing date was coming up in March. He did not take any steps to pursue an order for costs and did not appear at the hearing, with the result that no order as to costs was made, as Ms Perry had proposed in February, and the proceedings were finally dismissed. 34As discussed in Metwally v University of Wollongong [1985] HCA 28; (1985) 60 ALR 68 at [70], the Court's power to make an order such as that sought by Mr O'Connor: " ... 'must be exercised with great caution, after weighing what might otherwise be irremediable injustice against the public interest in maintaining the finality of litigation: see State Rail Authority of New South Wales v Codelfa Construction Pty Ltd [1982] HCA 51; (1982) 150 CLR 29, at 38." 35Given that on his own case an order setting aside that made on 24 March would not address his real concern with the orders made on 5 February, I can see no just basis for exercising any discretion in his favour in relation to the 24 March orders. 36As Barrett J explained in Northey v Bega Valley Shire Council [at [16]: "The central question is whether it is unjust to let the perfected order stand. The matter was put thus by Jordan CJ (Davidson J and Roper J concurring) in Vacuum Oil Co Pty Ltd v Stockdale (1942) 42 SR NSW 239 at 243-4: "The question is whether, upon the material that has been placed before us, there is a real likelihood that it would be unjust to the defendant to allow the judgment to stand. If so, it should be set aside on such terms as it will minimise the possibility of injustice to the plaintiff. If not, we should not interfere."" 37In this case such injustice has not been established. The March hearing date and the timetable for filing evidence and submissions were fixed in Mr O'Connor's presence. That the defendants did not file any evidence on which they wished to rely at the costs hearing, provides no reasonable explanation for Mr O'Connor's failure to advance any evidence or submissions or to appear at the hearing, notwithstanding what Mrs O'Connor understood from her enquiry. He had a fair opportunity to press his application. His failure to avail himself of that opportunity does not establish a just basis for the exercise of the further discretion which he now seeks. 38That conclusion is reinforced by Mr O'Connor's motion not being filed until August, some five months afterwards and then only by way of response to service of an examination order in the Local Court proceedings. As Barrett JA considered in Northey v Bega Valley Shire Council at [38], the passage of that time weighs against the exercise of any discretion in his favour. Further, those proceedings are not concerned with the costs of these proceedings and in all of those circumstances, I am satisfied that justice does not permit that the orders sought in relation to the Registrar's orders of 24 March orders to be made.
Section 350 of the Legal Profession Act 2004 39Section 350 of the Legal Profession Act permits the Court to extend the 12-month time limit for making an application for assessment of costs if, after having regard to the delay and the reasons for the delay, it concludes that it is just and fair for the application for assessment to be dealt with after the 12-month period. 40In this case, I do not consider that justice demands that the Court's discretion be further exercised in Mr O'Connor's favour, even were there a discretion to do so, which I consider there is not, in the circumstances earlier explained. 41 Mr O'Connor had the opportunity to pursue a costs assessment, as the result of the consent orders made on 5 February. He did not avail himself of that opportunity. His explanation for his failure to do so is entirely unconvincing, as I have explained. 42In the circumstances, I have not been convinced that having regard to the delay and the reasons for the delay, that it would be just and fair for Mr O'Connor to be given yet a further opportunity to pursue such an assessment. He has never bothered to pursue any costs assessment despite the nature of the serious complaints he explained he has always had in relation to those costs. 43 It is difficult to credit that if Mr O'Connor had truly ever held such concerns, that he would not have earlier pursued a costs assessment, as he was entitled to do, before the expiry of the applicable limitation period, or that he would not have done so, after the orders made in his favour, in his presence on 5 February 2014.
Orders 44In the result, for the reasons given, Mr O'Connor's motion is dismissed. 45The usual order as to costs is that they follow the event. In this case that is an order that Mr O'Connor pay the defendants' costs of the motion, as agreed or assessed. Unless the parties approach within seven days to have the matter relisted, that will be the Court's order.
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O'Connor
Perry