Pascoe v Edsome Pty Limited & 3 Ors

Dib v Regtop [2006] NSWCA 380 CASES CITED : Myers v Elman [1940] AC 282 Pascoe v Edsome Pty Limited & 3 Ors [2007] NSWSC 472 Wentworth v Rogers [1999] NSWCA 403

Joe Pascoe - Plaintiff Edsome Pty Limited - First Defendant PARTIES : Solitaire Pty Limited - Second Defendant Sea Coatings (Australia) Pty Limited - Third Defendant Sea Coatings Pty Limited - Fourth Defendant

COUNSEL : Mr P Barham - First Defendant Mr D Hooke - Third & Fourth Defendants

G H Healey & Co - Sydney - Plaintiff SOLICITORS : Vardanega Roberts - First Defendant N/A Second Defendant Ellison Tillyard Callanan - Fourth & Fourth Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20726/2001 - JOE PASCOE v EDSOME PTY LIMITED & 3 ORS (No 2)

JUDGMENT (Costs) 1 HER HONOUR: On 14 May 2007 I delivered judgment. Leave was granted for the plaintiff to commence these proceedings pursuant to s 151D of the Workers Compensation Act 1987 (NSW) against the first, third and fourth defendant. The notices of motion filed 29 March 2006 were dismissed. The matter was stood over so that the issue of costs could be argued. The plaintiff's solicitor, Mr G H Healey submitted that as the plaintiff's application was successful costs should be awarded in his client's favour. The defendants seek their costs. The third and fourth defendants seek their costs on an indemnity basis. 2 The Court has a wide discretion to award costs. In Dib v Regtop [2006] NSWCA 380 the Court of Appeal provided guidance for the making of an order for costs where the plaintiff has sought an extension of time to commence proceedings. The Court of Appeal stated at [106-108]: "Costs of the application in the court below

"106 The appellant seeks an order that the respondent pay her costs of the application before the primary judge on the basis that costs should follow the event: UCPR 42.1.

107 The respondent resists that order on two bases. First he argues by analogy with DCR Pt 39A r 32 that where a party applies for an extension of time then, unless the Court otherwise orders, "the party shall, after the conclusion of the proceedings, pay the costs of and occasioned by the application, or any order made on or in consequence of the application". That rule appears to reflect the approach adopted in Holt v Wynter (2000) 49 NSWLR 128 where on an application for extension of a limitation period the Court ordered the successful plaintiff to pay the defendant's costs of the application such order not to be enforced prior to final judgment in the action without the leave of the District Court. DCR Pt 39A r 32 was not reproduced in the Uniform Civil Procedure Rules and, in my view, the prima facie principle that costs should follow the event should apply.

108 However the respondent seeks to attract the Court's discretion to relieve against that prima facie principle because the appellant always needed to seek the court's indulgence to proceed so that he should not be ordered to pay the costs below unless his conduct in resisting the application was "wholly unreasonable"." 3 Their Honours considered the facts and circumstances in Dib decided that the respondent had not displaced the principle that costs below should follow the event. 4 Each case depends on its facts and circumstances. In Pascoe v Edsome Pty Limited & 3 Ors [2007] NSWSC 472, the application for leave to commence proceedings in these proceedings, at [10] of my judgment stated: "Between 6 March 2002 and 21 August 2006, the Court set numerous timetables (27) to get this matter ready for trial but the plaintiff did not comply with them. The plaintiff's solicitors, G H Healey, proffered two main reasons for the non-compliance. The first was the difficulty in obtaining an experts report. The second was the deregistration of two of the defendants. The plaintiff submitted that the matter was delayed by the non-availability of expert and medical reports by reason of the plaintiff's inability to fund his expert Mr Spencer, the necessary delays in obtaining access to multiple secure industrial premises for inspection by Mr Spencer and the requirements and ultimate retirement of Dr Gianoutsos, then replaced by Dr Crawford. Leaving aside the plaintiff's limited financial resources which were also a contributing factor for the delay, the lengthy delay in preparing this matter for trial, I regret to say has been largely caused by the plaintiff's solicitor." 5 It is to be expected that a plaintiff in seeking an indulgence from the Court, should have acted expeditiously to have the limitation matter heard. This did not happen here. On 17 August 2001, the proceedings were commenced. It was another two years before the plaintiff sought leave to commence proceedings, namely on 23 December 2003 when the notice of motion seeking the extension of time was filed. This motion was determined on 14 May 2007. By that time another 3½ years had elapsed. It was only when the defendants filed notices of motion on 29 March 2006 seeking to have these proceedings dismissed an impetus was provided for the plaintiff's solicitors to take steps to have his application heard. In my view, in these circumstances the defendants have displaced the principle that costs follow the event. It is my view that the plaintiff should pay the defendants' costs. 6 The more difficult issue is whether it should be the plaintiff or the plaintiff's solicitor who should bear the burden of paying those costs. Section 99 of the Civil Procedure Act 2005 (NSW) regulates when a practitioner may be ordered to pay the costs. Those circumstances are where it appears to the Court that costs have been incurred by the serious neglect, serious incompetence or serious misconduct of the legal practitioner, or improperly or without reasonable cause, in circumstances for which the legal practitioner is responsible. This section, broadly, replicates the former s 76 of the Supreme Court Act 1970 and Part 52A of the Supreme Court Rules 1970. 7 In Wentworth v Rogers [1999] NSWCA 403, Handley, Stein JJA and Sheppard AJA cited with approval the dictum of Lord Wright in Myers v Elman [1940] AC 282 where at 318-319, Lord Wright stated: "The cases of the exercise of this jurisdiction [to order costs against solicitors] to be found in the reports are numerous and show how the Courts were guided by their opinion as to the character of the conduct complained of. The underlying principle is that the Court has a right and a duty to supervise the conduct of its solicitors, and visit with penalties any conduct of a solicitor which is of such a nature as to tend to defeat justice in the very cause in which he is engaged professionally, as was said by Abinger CB in Stephens v Hill (1842) 10 M & W 28. The matter complained of need not be criminal. It need not involve peculation or dishonesty. A mere mistake or error of judgment is not generally sufficient, but a gross neglect or inaccuracy in a matter which it is a solicitor's duty to ascertain with accuracy may suffice. Thus, a solicitor may be held bound in certain events to satisfy himself that he has a retainer to act, or as to the accuracy of an affidavit which his client swears. It is impossible to enumerate the various contingencies which may call into operation the exercise of this jurisdiction. It need not involve personal obliquity. The term professional misconduct has often been used to describe the ground on which the Court acts. It would perhaps be more accurate to describe it as conduct which involves a failure on the part of a solicitor to fulfil his duty to aid in promoting in his own sphere the cause of justice." 8 Mr G H Healey, the solicitor representing the plaintiff, is an undischarged bankrupt. A costs order made against him personally would be futile. Although Mr Healey may have been in a position of conflict in arguing this costs matter, he stated from the bar table that the plaintiff has not paid any fees and if this Court were to make a costs order against the solicitors, it may put an end to the plaintiff's claim due to his (the plaintiff's) impecuniosity. 9 Any costs order against the plaintiff's legal representative would have to be against the firm of solicitors. But what firm? Variously, the firm of solicitors has been described as G.H. HEALEY & CO, with Graeme R Jensen Co SUTHERLAND (S/C 17/08/2001); G.H. HEALEY & CO - SYDNEY (Affs, Plaintiff, 22/12/2003 and Tan, 19/05/2005); and GREGORY HARRISON HEALEY - Sutherland (Aff Healey, 21/08/2006). I am at a loss as to what firm should be held responsible. 10 At this stage, I make an order that the plaintiff is to pay the defendants' costs. The issue of whether it should be the plaintiff's solicitors or the plaintiff who should bear the burden of paying those costs is stood over to the hearing. It would only be if the plaintiff's solicitors are ordered to personally pay the costs that the issue of costs being payable on an indemnity basis would arise. The order I make is that the plaintiff is to pay the costs of the motions dated 22 December 2003, 12 May 2006 and 29 March 2006 on a party/party basis as agreed or assessed. The issue of whether the plaintiff's firm of solicitors should bear these costs is stood over to the hearing.

(1) The plaintiff is to pay the costs of the motions dated 22 December 2003, 12 May 2006 and 29 March 2006 on a party/party basis as agreed or assessed.

(2) The issue of whether the plaintiff's firm of solicitors should bear these costs is stood over to the hearing. **********

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