1 On 15 March 2006 in Piriz v AAPT Limited (No 2) [2006] NSWIRComm 75, I determined notices of motion filed by Eduardo Piriz ("the applicant") and AAPT Limited ("the respondent"). Having found that the applicant had failed to comply with self-executing orders made by the Court on 23 October 2005, I made orders regularising any defect in the service of affidavits by the applicant.
2 I caused this matter to be listed pursuant to r 209 of the Industrial Relations Commission Rules 1996 ("the Rules") to hear submissions on behalf of the applicant's solicitor, Mr James Biady, as to why the Court should not make an order directing Mr Biady to pay the costs that had been ordered to be paid to the respondent in respect of the motions and to disallow his own costs in respect of those motions.
3 Rule 209 of the Rules is in the following terms:
209 Barrister or solicitor or agent to repay costs due to delay, misconduct etc
(1) Where costs are incurred improperly or without reasonable cause, or are wasted by undue delay or by any other misconduct or default, and it appears to the Commission that a barrister, solicitor or agent is responsible, the Commission may, after giving the barrister, solicitor or agent a reasonable opportunity to be heard:
(a) disallow the costs as between the solicitor or agent and the solicitor's or the agent's client,
(b) disallow the costs as between the barrister and that barrister's instructing solicitor or as between the barrister and the client,
(c) direct the barrister, solicitor or agent to repay to the client costs which the client has been ordered to pay to any other party,
(d) direct the barrister, solicitor or agent to indemnify any party other than the client against costs payable by the party indemnified.
(2) Without limiting the generality of subrule (1), a barrister, solicitor or agent is responsible for default for the purposes of that subrule where any proceedings cannot conveniently proceed, or fail or are adjourned without useful progress being made, because of the failure of the barrister, solicitor or agent:
(a) to attend in person or by a proper representative,
(b) to file any document which ought to have been filed,
(c) to deliver any document which ought to have been delivered for the use of the Commission,
(d) to be prepared with any proper evidence or account, or
(e) otherwise to proceed.
(3) The Commission may, before making an order under subrule (1), refer the matter to the Registrar for enquiry and report.
(4) The Commission may order that notice of any proceedings or order under this Rule must be given to the client in such manner as may be specified in the order under this subrule.
(5) The term solicitor in this Rule includes the solicitor's agent.
Background
4 These proceedings have a lamentable history. A summons seeking relief under s 106 of the Industrial Relations Act 1996 ("the Act") was filed by the applicant on 10 May 2002.
5 On 21 October 2005, I rejected a notice of motion by the respondent seeking the dismissal of the summons for want of prosecution. Various self-executing orders were made on this date, which in summary, required the applicant to file and serve all affidavit material to be relied upon by 23 December 2005: Piriz v AAPT Limited (No 2). The applicant served affidavits which it sought to rely upon by facsimile on 23 December 2005, including the applicant's affidavit, minus the annexures. The Rules do not provide for such service.
6 The evidence disclosed that Mr Biady left to travel overseas on 6 December 2005, leaving a solicitor, Ms J Khoo, who had been admitted in August 2005, with the carriage of this matter. In Piriz v AAPT Limited (No 2), I said at [18]:
I can only infer that Mr Biady thought that it was appropriate to leave an inexperienced solicitor responsible for complying with orders that included a self-executing order. A fair reading of my earlier judgment in Piriz v AAPT would lead to the conclusion that these proceedings remained on foot by the finest of margins. Furthermore, the way this case proceeded, as put by Mr Prince, makes it plain that a conscious decision was taken to proceed in the way they did and not plead mistake or other mitigation but rather choosing to contest the default on the basis that it was a most technical breach of the Rules.
Evidence in Rule 209 Proceedings
7 Mr N J Beaumont of counsel appeared for Mr Biady and tendered an affidavit of Mr Biady sworn 17 March 2006. Mr Biady stated that in late 2004, he met with prospective witnesses and prepared statements for them in December 2004 and January 2005. Arrangements were made for a barrister to convert the statements into appropriate affidavit form. The affidavits were returned to Mr Biady who formed the view that further work was required on the affidavits. Therefore, in July 2005, Mr Biady employed a senior locum solicitor to undertake that task. At about this time, the respondent's motion for dismissal of the proceedings was part heard. To avoid incurring unnecessary costs, Mr Biady did not have the affidavits finally settled by counsel until after judgment was delivered in respect of the strike out application, such judgment being delivered on 21 October 2005.
8 Mr Biady stated that, prior to his departure overseas in December 2005, the main task that remained to be done, was to have counsel settle the affidavit material for the applicant and for affidavits to be sent to witnesses for approval and swearing and then to be filed and served. This was in essence the task that Mr Biady left for Ms Khoo to perform.
9 Mr Biady deposed that, prior to his departure, he had arranged that during his absence overseas, a Mr Brett Hurley, an experienced and senior solicitor, who had previously had his own legal practice and had over 11 years post-admission experience, would be available to supervise and give advice as necessary to Ms Khoo. Mr Hurley had been involved as a consultant to Mr Biady's legal practice since early 2005. In addition, Mr Biady had arranged for two senior solicitor principals of another law firm located on the same floor as Mr Biady's practice to be available to assist Ms Khoo. Arrangements were also made for Mr Graeme Fernie, a solicitor who often appears as agent for Mr Biady, to also be available.
10 Mr Biady stated that whilst overseas he was also available from time to time to speak by internet telephone, by email or internet instant messaging and he made contact with Ms Khoo on a number of occasions.
Consideration
11 The question for determination is whether "costs … [were] wasted by undue delay or by any other misconduct or default" and that "it appears to the Commission … a solicitor is responsible."
12 Mr Beaumont submitted that the Court only had the power to make an order where it is satisfied that:
(a) the solicitor is responsible for "undue delay" or "other misconduct or default", and
(b) that conduct caused the waste of costs.
13 It was further submitted that the demonstration of a causal link is essential: Ridehalgh v Horsefield [1994] Ch 205 at 237.
14 The principles applicable to the consideration of exercising a statutory power to order costs against a legal practitioner was recently considered by the Court of Appeal in Lemoto v Able Technical Pty Ltd and Others (2005) 63 NSWLR 300, where McColl JA, with whom Hodgson and Ipp JA agreed, stated at [92] - [93]:
[92] The new Div 5C should be construed against the background of the following principles which can be gleaned from the English and Australian authorities which have considered the power to order legal practitioners to pay the costs of proceedings in which they have represented parties:
(a) The jurisdiction to order a legal practitioner to pay the costs of legal proceedings in respect of which he or she provided legal services must be exercised "with care and discretion and only in clear cases": Ridehalgh (at 229); Re Bendeich (No 2) (1994) 53 FCR 422; Deputy Commissioner of Taxation v Levick (1999) 168 ALR 383 at 389 [11]; 43 ATR 621 at 627 [11], per Hill J; Levick v Commissioner of Taxation (2000) 102 FCR 155 at 166 [44]; Gitsham v Suncorp Metway Insurance Ltd [2002] QCA 416 at [8], per White J (with whom Davies JA and Williams JA agreed); De Sousa v Minister for Immigration, Local Government and Ethnic Affairs (1993) 41 FCR 544; Money Tree Management Services Pty Ltd and Institute of Taxation Research v Deputy Commissioner of Taxation (No 3) (2000) 45 ATR 262;