1 I am dealing with a notice of motion filed on 2 October 2009 by Leon Nikolaidis, Michael John Zwar and the legal personal representative of Mitrofanis D Nikolaidis. The notice of motion was heard by me on 17 December 2009.
2 The applicants seek, as against John Clement Preston and Western Suburbs Constructions Pty Ltd, an order under rule 13.4 of the Uniform Civil Procedure Rules 2005 "that the proceedings herein be dismissed". Rule 13.4 is in these terms:
"(1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:
(a) the proceedings are frivolous or vexatious, or
(b) no reasonable cause of action is disclosed, or
(c) the proceedings are an abuse of the process of the court,
the court may order that the proceedings be dismissed generally or in relation to that claim.
(2) The court may receive evidence on the hearing of an application for an order under subrule (1)."
3 The "proceedings herein" are proceedings 4001 of 1993 commenced by a summons filed more than sixteen and a half years ago, on 24 August 1993. The persons named in that summons as plaintiffs are the present respondents. It will be convenient to refer to them as "the plaintiffs". The named defendants are Mitrofanis D Nikolaidis and Leon Nikolaidis.
4 The summons filed on 24 August 1993 sought orders as follows:
"1. ORDERS pursuant to section 208 of the Legal Profession Act 1987, that Bills of costs be delivered by the Defendants to the Plaintiff:
(a) In respect of the matters set out in Schedule A hereto;
(b) Alternatively, in respect of such of the matters set out in Schedule A hereto wherein accounts were rendered by the Defendants to the Plaintiff within twelve (12) months of the commencement of these proceedings.
2. ORDERS pursuant to section 199 and section 200 of the Legal Profession Act 1987, that there be referred for taxation:
(a) The matters set out in Schedule A;
(b) Alternatively, such of the matters set out in Schedule A as the court deems appropriate.
3. AN ORDER pursuant to section 208 of the Legal Profession Act 1987, that the Defendants deliver up to the Plaintiffs, on such terms, if any, that the Court deems appropriate, the Plaintiff's documents in the matters of:
(a) P R & L M Moore T/as Sunrise Pools v. John Preston
(b) Western Suburbs Constructions Pty Ltd v. Monier Ltd and Anor.
(c) J C Preston Pty Ltd (In Liquidation) and Others v. Geoffrey K Strong - Supreme Court (NSW)
(d) J C Preston Pty Ltd (In Liquidation) v. Neil King - Supreme Court (NSW).
4. AN ORDER that accounts be taken:
(a) Of payments made to the Defendants for Defendants' costs, and the disbursement or application of such payments, in respect of the matters set out in Schedule A, from 1 January 1989 to 30 October 1992;
(b) Of the payment of $50,000.00 into the Defendants' trust account, in or about July 1989 and the disbursement or application hereof, in respect of the matter Western Suburbs Constructions Pty Limited (formerly Preston Erections Pty Limited) and G K N Australia Limited.
5. That for the purposes of the orders sought in paragraph 4 above, directions be given as to the manner of taking the said accounts.
6. AN ORDER that the matters referred to in paragraphs 4 and 5 above be referred to the Master, Equity Division, to take accounts, and make inquiries to enable such accounts to be taken."
5 The annexed schedule listed twenty client assignments undertaken by the defendants for the plaintiffs and other persons.
6 On 9 November 1993, R S Hulme J made orders as follows:
"1. I order that the defendants do deliver to the plaintiffs on or before Thursday 10 November bills of costs in respect of the matters numbered three, four, five, seven, ten, thirteen, fourteen and fifteen on the document entitled 'Summary of accounts owing' initialled by me and placed with the papers.
2. I order that the defendants do deliver to the plaintiffs on or before Tuesday, 30 November, bills of costs in respect of the other matters or groups of matters in that summary of accounts owing.
3. I direct that the defendants within fourteen days serve on the plaintiffs an affidavit annexing a copy of their office and trust account records of the matters listed in schedule A to the summons herein."
7 At that point, therefore, the court had taken steps to ensure that bills of costs in taxable form were brought into existence in relation to all matters referred to in the schedule annexed to the summons and R S Hulme J stood the summons over to 6 December 1993 "with a view to making an order for taxation of such bills of costs".
8 The matter of taxation of the bills directed by the orders of 9 November 1993 to be prepared was dealt with by R S Hulme J on 16 December 1993 when he made orders that included the following:
"1. Order that there be referred for taxation the Defendants' bills of costs in respect of the matters listed in the schedule to the summons herein filed on 24 August 1993.
2. Order that, conditional upon there first being filed in court a written undertaking to the court given by such expert that
(i) he will use such access to the defendants' files, solely for the purposes of taxation of bills of costs relating thereto;
(ii) he will insure that any copies taken of documents in the files are used solely for the purposes of taxation of bills of costs relating thereto; and
(iii) he will ensure that, as long as any copies he takes of documents in such files remain in existence, such copies shall remain in his possession at all times;
the Defendants on reasonable notice make available to a costs expert appointed by the plaintiffs all of their files in respect of the matters listed in the schedule to the summons herein, such access to commence not later than 31 January 1994."
9 The proceedings were next before the court on 3 February 1994 when R S Hulme J made certain directions for the filing and service of affidavits in relation to "paragraphs 4, 5 and 6 of the Plaintiffs' Summons dated 23 August 1993". After several extensions of the timetable set on 3 February 1994, the matter came before R S Hulme J on 9 June 1994 and his Honour dealt with a notice of motion filed by the defendants on 27 May 1994 seeking the appointment of a referee "to take accounts of payments made to the defendants for the defendants' costs, and the disbursements or application of such payments, in respect of the matters set out in Schedule A to the summons dated the 17th of September 1993".
10 Upon the hearing of that notice of motion, R S Hulme J made orders as follows:
"The Court orders that -
1. Pursuant to Part 72r(2)(1) refer to Mr G D Needham, QC the account and objections referred to in paragraph 3 below for inquiry and report.
2. In these terms of reference the term 'Plaintiffs' means and includes:
Preston International Pty Limited (Thorsten)
(ACN 003 792 247)
Preston Erection Pty Limited (Preston Equipment Hire)
(ACN 003 991 062)
Nilbrook Pty Limited (ACN 050 070 374)
Gemit Pty Limited (ACN 001 951 239)
Mevon Pty Limited (ACN 002 601 363)
Norfeld Pty Limited (ACN 003 792 229)
Four MJ Pty Limited (ACN 001 447 481)
Gateside Pty Limited (ACN 003 798 945)
Down to Earth Springwater (NSW) Pty Limited (Dunwich)
(ACN 000 815 172)
Everything and Anything Storage Pty Limited (Redewood)
(ACN 002 739 399)
Preston Engineering Pty Limited (ACN 000 531 546)
Down to Earth Springwater Pty Limited (ACN 050 058 476)
Deep Rock Springwater Pty Limited (ACN 056 626 941)
JC Preston Pty Limited (in Liquidation) (No ACN No.) 1980 litigation
JC & ME Properties (Partnership) (No ACN No.)
John Preston
Marjo Preston
Preston Family Trust
3. Make the following directions for the purpose of facilitating the reference:
(a) within 14 days of the making of this Order the Defendants shall
(i) serve on the Plaintiffs their detailed account verified by their affidavit of all moneys received by them from the Plaintiffs (or on their behalf) and disbursed by the Defendants on their behalf as solicitors, and of the dealings and transactions of the Defendants therewith upon the trust and other accounts kept by the Defendants in relation to the plaintiff;
(ii) the said account shall specify in respect of each payment and receipt
(1) the date and account thereof;
(2) to whom the payment was made;
(3) the purpose or account to which the amount was paid, appropriated or received, as the case may be;
(4) the manner in which all payments received in respect of fees and disbursement were dealt with, with reference to particular files and matters.
(b) permit the Plaintiffs to inspect all entries in the Defendants' trust and general account ledgers relating to any work done or accounts charged by the Defendants in connection with the affairs of the Plaintiffs;
(c) The items of such account shall be numbered consecutively;
(d) Within 21 days after service upon them of the said account and affidavits the Plaintiffs to notify the Defendants of their objections and any items in dispute.
(e) The hearing of the inquiry to be before the referee on such date as he may direct.
(f) Permit the Defendants to inspect the entries in the Plaintiffs (as defined to Clause 2) ledgers or other accounting records relating to payments made or alleged to be made to the Defendants.
4. Direct that (without affecting the powers of the Court as to costs) the parties namely John Preston and Western Suburbs Constructions Pty Limited and Mitrofanis D Nikolaidis, Leon Nikolaidis and Michael Zwar be jointly liable to the referee for the fees payable to him.
5. Direct that the parties deliver to the referee forthwith a copy of this order together with a copy of Pt 72 of the Rules.
6. Direct that -
(a) subject to paragraphs (b) and (c) hereof the provisions of Pt 72 r8 shall apply to the conduct of proceedings under the reference;
(b) the referee consider and implement such manner of conducting proceedings under the reference as will without undue formality or delay enable a just determination to be made including if the referee sees fit the making of enquiries by telephone, site inspection, inspection of plant and equipment and communication with experts retained on behalf of the parties;
(c) the referee submit the report to the Court in accordance with Pt 72 r11 addressed to the Associate to Mr Justice Hulme on or before 1 September 1994.
7. The referee shall have power to permit such amendments or additions to the matter in paragraph 3 as the referee sees fit in order to dispose of the true issues between the parties the subject of the reference.
8. Grant liberty to the referee or any party to seek directions with respect to any matter arising in proceedings under the reference upon application made on twenty-four hours' notice or such less notice as to the Court seems fit through the Associate to his Honour Mr Justice Hulme.
9. Reserve costs of the proceedings.
10. Stand the proceedings over for further directions on 15 September 1994."
11 It is clear from the reference in order 1 to "paragraph 3 below" - and from the terms of the notice of motion - that the referee was to take an account of receipts and payments as between the plaintiffs and the defendants named in the summons and that these orders were made by reference to the claims in paragraphs 4, 5 and 6 of the summons.
12 At the end of 1994, therefore, the matter of preparation of bills of costs and taxation of costs had become the subject of the orders of 9 November 1993 and 16 December 1993; while the matter of an account had become the subject of the reference out ordered on 9 June 1994. The first aspect, arising under paragraphs 1, 2 and 3 of the summons, had been dealt with by orders for the preparation of bills of costs in relation to the relevant solicitor-client matters, an order for taxation of those bills and an order allowing access to the defendants' files to a "costs expert" retained by the plaintiffs, no doubt to assist the plaintiffs in preparing their case in anticipation of proceedings before a taxing officer. The second aspect, covered by paragraphs 4, 5 and 6 of the summons, had been referred out to a referee for the taking of the relevant accounts.
13 The two procedures thus set in train were separate but there was, of necessity, an overlap between them, in that a full accounting between the parties could not be completed without completion of the quantification involved in the taxation of costs. This interdependence was recognised in a judgment delivered by R S Hulme J on 28 February 1995 to which I now turn.
14 There is reference in that judgment of 28 February 1995 to the fact that the state of the account between the parties became the subject of a report commissioned by the defendants from Armstrong Wily, a firm of accountants. The preparation of such a report was not something envisaged or required by the court orders. The report seems to have been commissioned by the defendants independently and by their own decision. Having referred to the Armstrong Wily report, R S Hulme J continued:
"The conclusion at which that firm arrived was that the defendants were indebted on those accounts - which I interpolate did not reflect any taxation of bills - in an amount of some $116,000, an amount which it will be noted exceeds that which the defendants were claiming."
15 R S Hulme J later said:
"Following upon the plaintiffs' receipt of that report and consideration of the matter by accountants or other persons engaged on their behalf, the plaintiffs indicated they would no longer pursue the topic of the reference before Mr Needham. I think the only proper inference to be drawn from the plaintiffs' conduct in this regard is that the plaintiffs were conceding that the defendants' claim for some $97,000 was, on the basis which was then advanced, correct. Again I interpolate, this is without any taxation."
16 His Honour then said:
"Accordingly the plaintiffs have lost the issue raised by order 4 in the ultimate, though they did obtain some interlocutory orders directed to facilitating the resurrection of that issue."
17 R S Hulme J went on to consider the costs orders that should be made. Having said that he had decided that each side should bear its own costs, his Honour continued:
"In doing so I make it clear that I am not directing attention to the question of who should pay for the preparation of the bills of costs themselves or who should pay for the costs of and incidental to their taxation, but I do intend that the orders which I have envisaged should be made irrespective of the result which ensues upon taxation.
The issues on prayers 3 and 4 of the summons as they have been raised before me, do not depend upon the ultimate result of taxation.
It seems to me that I can effect the intention apparent in the above if the formal orders I make are these:
(1) I confirm existing orders for costs.
(2) Except in so far as orders have previously been made thereon, I dismiss the summons.
I make no order as to costs."
18 The references in this judgment to an indication by the plaintiffs that they "would no longer pursue the topic of the reference before Mr Needham" are explained by a letter of 15 November 1994 from the plaintiffs' solicitors to the defendants' solicitors that was obviously before the court. The letter read in part as follows:
"I confirm my telephoned advice on 11 th November 1994 that, in consequence of the books of your firm being made available pursuant to the orders made on 9 th June 1994, confirmed on 12 th October 1994, my clients' accountants have been able to reconcile payments made by my clients to your firm with particular accounts for professional work. It is quite apparent that, in the absence of this examination such reconciliation would have been impossible. Because the reconciliation was effected it will now be unnecessary for the parties to incur the expense of pursuiung the reference.
Would you please let me know by return that I may inform Mr Needham QC accordingly.
With reference to paragraph 2 of your letter dated 7 th November 1994 I confirm Mr Zwar's advice on 11 th November 1994 that the document headed 'Confirmation of retainer' is the only document evidencing an agreement as to a fee rate between your firm and my clients.
I expect to be filing and serving objections to your bills of costs shortly. They are now in the final stages of preparation."
19 The foreshadowed objections to the defendants' bills of costs were obviously served, since, in March 1996, the solicitor for the defendants swore an affidavit in which he said:
"The Defendants have sought taxation of bills of costs rendered to the First and Second Plaintiffs and filed during the course of the proceedings.
Objections have been received from the Plaintiffs and in order to finalise the taxation, it will be necessary to determine as a preliminary issue the retainer between the parties in connection with work done on behalf of both the First and Second Plaintiffs and other companies associated with the First and Second Plaintiffs.
Approximately sixteen (16) itemised bills of costs were delivered to the First and Second Plaintiffs in January 1994 and in those circumstances the Defendants seek an order that all taxation be consolidated and dealt with before a taxing master."
20 This affidavit was sworn in support of a notice of motion filed on 14 March 1996 seeking an order as follows:
"That the application for assessment of Party/Party Costs presented by the First and Second Plaintiffs on or about 16 th February 1996 be consolidated with the taxation of all bills rendered by the Defendants to the First and Second Plaintiffs and filed in these proceedings herein."
21 The Legal Profession Reform Act 1993 had introduced, with effect from 1 July 1994, a system of assessment of costs by legal practitioners appointed by the Chief Justice to be costs assessors, to replace the time-honoured procedure of delivery of bills of costs, notification of objections and taxing of the bills by an officer of the court in what was, in substance, an adversary proceeding. The affidavit just quoted makes it clear that the plaintiffs, acting outside the scope of these proceedings, had resorted to the new costs assessment process some time after 1 July 1994 in relation to all the costs the subject of these proceedings. The orders for taxation of bills of costs made on 16 December 1993 nevertheless remained in force.
22 The notice of motion filed on 14 March 1996 was obviously prompted by a concern that inconsistencies or other difficulties were emerging from the steps taken to obtain assessments of costs under the new system while the order for taxation under the old system remained extant. The solicitor for the defendants gave further explanation in an affidavit of 17 May 1996:
"The Defendants have requested this Honourable Court to undertake taxation of the Bills of Costs presented by the Defendants to the Plaintiffs in December 1993 and January/February 1994.
Annexed hereto and marked with the letter 'A' is a true copy of a letter dated 22 nd March 1996 to the Taxing Officer of the Supreme Court of New South Wales.
At present it appears that the cost division of this Honourable Court is reluctant to undertake taxation of files due to amendments to the Legal Profession Act which took effect from July 1994. I am advised by the Taxation Registry that no further taxations are being conducted by the Court.
An order was made by His Honour, Mr Justice Hulme on that the Bills filed in Court be taxed.
Annexed hereto and marked with the letter 'B' is a true copy of His Honour's order dated 16 th December 1993."
23 The "accompanying Notice of Motion" is a notice of motion filed on 31 May 1996 seeking an order that Mr Costs Assessor Hattersley "be restrained from conducting any further assessment in connection with the Bill of Costs delivered by the First and Second Respondents dated 13 March 1996", being, no doubt, a bill that had been made the subject of the new system of costs assessment.
24 On 13 May 1996, however, Mr Hattersley told the defendants' solicitor that he had already completed the assessment assigned to him. He furnished a certificate of determination dated 31 May 1996.
25 This caused an application to come before Young J as duty judge on 25 July 1996. His Honour noted that the costs recoverable by the defendants had still not been quantified when the system of taxation of costs was superseded. He said, in relation to that, in his judgment of 25 July 1996:
"Regulation 80 under the Legal Profession Act probably operates to amend the order that was made by Hulme J before 1 July 1994 as to taxation, so that under regulation 80(3) the costs are to be assessed in accordance with the new Pt 11 of the Act, but the former taxation principles apply."
26 Young J's judgment concluded:
"Accordingly, I will stay the enforcement of the order for taxation of the respondent's bill of costs, with liberty to apply to lift the stay should the ongoing process break down.
The other bills of costs now have to be considered by the appropriate official. They will need to be dealt with by assessment and the assessor will apply the principles of taxation.
There is an issue between the parties not that the solicitors were retained by the client, but as to the terms of the retainer. It seems sensible to isolate that issue and refer it to the decision of the same person who makes the assessment of costs.
Each party should pay their own costs, except that the defendant should pay the costs of preparing and filing the plaintiff's notice of motion of 25 June 1996. Otherwise I make orders in accordance with the short minutes of orders initialled by me, dated and placed with the papers."
27 It appears that the orders as made on 25 July 1996 (that is, the orders in the short minutes) were not precisely as foreshadowed in the judgment. The orders made were:
1. Order that the plaintiffs be restrained until further order of the court from enforcing or seeking to enforce the certificate of M L Hattersley in relation to costs payable pursuant to orders of Hulme J.
2. Liberty to the plaintiffs to apply on 7 days notice to vary or reserve [sic] such stay.
3. Direct the proper officer of the court to refer to M L Hattersley solicitor the defendants' bill of costs for assessment pursuant to s 206 of the Legal profession Act 1987.
4. Refer the question of the terms of the defendants' retainer by the plaintiff to M L Hattersley for inquiry and report.
5. Liberty for the referee and the parties to approach the court for directions under Pt 72 r 8 on 3 days notice.
6. Defendant undertakes to provide plaintiff's solicitors and its costs assessors with access to the rules [sic; scil: "files"] on reasonable notice for a period of 6 weeks."
28 It subsequently emerged that this task set by order 4 caused difficulty for Mr Hattersley. He said so in a letter of 27 February 1998 to the plaintiffs' solicitors:
"The terms of Order 5 [sic] cause me difficulty. Whilst I am able to conclude the assessments according to law by issuing my determination I do not know what further 'enquiry' I should make and what and to whom I should 'report'."
29 In a subsequent letter dated 6 April 1998, Mr Hattersley observed that the process undertaken by a costs assessor was "totally paper driven" and that there were "no avenues available to me to hear and see any witnesses giving evidence scrutinised and tested through cross examination". Mr Hattersley then said:
"Accordingly I would encourage the parties or one of them to seek directions and declarations from the Court so as to establish what were the precise terms and conditions of the solicitors' retainers from time to time."
30 It was no doubt because of these difficulties that it was ordered by Young J on 5 November 1998 that the order of 25 July 1996 referring to question of retainer to Mr Hattersley for inquiry and report be set aside. His Honour directed that the plaintiffs file and serve points of claim "on the issue of the terms of the retainer by 25 November 1998, that points of defence be filed and served by 9 December 1998", and that any affidavits to be relied on by the defendants in the matter of the terms of the retainer be filed and served by 23 December 1998, with any affidavits of the plaintiffs in reply to be filed by 10 February 1999.
31 The proceedings came back before Young J on 18 February 1999. His Honour extended the timetable set on 5 November 1998 with respect to determination of the terms of the retainer so that the deadline for the final step was 7 June 1999 and the matter was to come back to court for mention on 17 June 1999. On that date, the timetable was extended to a date in September 1999 and the proceedings were stood over to 27 September 1999 for mention. There was yet another extension of the timetable so that the last step was due to be taken by 6 December 1999 and the matter was to come back to court on 13 December 1999.
32 On 26 July 2000, the plaintiffs (or, more precisely, Mr Preston alone) filed a notice of motion seeking leave to amend the summons. The proposed amendments appeared from a form of amended summons annexed to the notice of motion which, in the usual way, showed the amendments by underlining. There were three proposed amendments, namely, the addition of eleven new plaintiffs (as third to thirteenth plaintiffs), the addition of Mr Michael John Zwar as a defendant and the addition of a prayer for an order "that any sums found, by virtue of the taxation and accounts referred to herein, to have been overpaid by any or all of the plaintiffs to the defendants be repaid".
33 The amendment application was heard and determined by Master McLaughlin on 25 August 2000. It is pertinent to quote at length from the judgment. After referring to the parties and the relief sought by the summons as originally filed, the Master said:
"9. I have been informed that on 28 February 1995 final orders were made by Hulme J in the terms of prayers 1 and 2 in the summons, and that otherwise the summons was dismissed. I have not been informed as to whether his Honour's order was ever entered.
10. There is a most voluminous file in this matter, the contents of which were the subject of comment by Young J on 25 July 1996, when his Honour said:
'It is really absurd that it should have taken the amount of paper that has been created and the amount of delay that has occurred.'
11. Since the matter came before Young J more than four years ago a considerable quantity of additional paper has been created in the matter. From what I have been told -- and I would emphasise that no evidence has been placed before the Court by affidavit or otherwise in support of the present notice of motion - the plaintiffs were formerly clients of the defendants, who are solicitors. It would appear from the judgment of Young J on 25 July 1996 that there is a dispute (described by his Honour as 'a squabble') between solicitor and client as to costs.
12. The amended summons (which by the notice of motion presently before me the first plaintiff seeks to file) seeks the relief sought in the original summons together with a further prayer for relief which is consequential upon the earlier prayers for relief originally sought. That additional prayer for relief is 'an order that any sums found by virtue of the taxation and accounts referred to herein to have been overpaid by any or all of the plaintiffs to the defendants be repaid'.
13. More significantly, however, is the fact that the amended summons includes upon its entitlement the names of eleven additional plaintiffs (being described as referring to one to thirteen plaintiffs respectively) and the name of an additional natural person included in the description of the defendants. I have been informed by Counsel for the defendants that the additional person was in fact joined as a defendant many years ago at an early stage in the proceedings and that such additional joinder at this stage is not necessary. More significantly to the present application if the proposed joinder of the eleven additional plaintiffs.
14. The first plaintiff seeks to ground his present application upon the provisions of Part 20 rule 1 of the Supreme Court Rules . That rule relates to amendment of any document in the proceedings. It does not expressly relate to the joinder of parties. The addition of parties is the subject of express provision in Part 8 of the Rules, in particular Part 8 rule 8.
15. The defendants oppose the present application. The ground for the opposition essentially is that the relief sought in the summons has now been the subject of final orders by Hulme J on 28 February 1995. His Honour granted the relief sought in prayers 1 and 2 in the summons. His Honour otherwise dismissed the summons.
16. In those circumstances it is the submission of the defendants that the proceedings have been brought to a conclusion and that what the first plaintiff now seeks to do is in effect to resurrect proceedings that have been totally and finally dealt with.
17. The fact that the processes of conducting the taxation and the assessment, the subject of orders 1 and 2 in the summons may not yet have been brought to a conclusion does not in my view in any way affect the validity of the foregoing submission on the part of the defendants. It seems to me that what the applicant is attempting now to do is to reinstate proceedings which, if they should have been instituted at all, should have been instituted no later than the making of the final orders by Hulme J five and a half years ago.
18. To accede to the present application would in my view be verging upon an abuse of the processes of the Court. In any event, no evidence whatsoever has been placed before the Court which would have the effect of justifying the Court in adding the eleven additional plaintiffs to the proceedings.
19. The applicant has chosen not to disclose to the Court firstly why those entities and persons should now be joined, and secondly, why they were not joined at an earlier stage in the proceedings. Although the defendants do not rely upon this submission in their present opposition to the relief sought in the notice of motion, I observe that Part 8 rule 8 provides, in subrule (2) to thereof, that a person shall not be added as a plaintiff without his consent, and that there is no consent presented to the Court in respect to the proposed additional eleven plaintiffs. However, as I say, although this matter was originally raised in opposition by the defendants, the defendants no longer rely upon non-compliance with that provision of the rules.
20. I have no hesitation whatsoever in dismissing the present notice of motion."
34 The proceedings came before Bryson J on 11 April 2001. His Honour said in a judgment of that date:
"It seems to me that assessment of costs (as has been ordered in accordance with the claims in the Summons that certain bills rendered by the defendants should be taxed) cannot as a matter of practicality be sent back to Mr Hattersley as assessor or to some new assessor without first determining the issue which the plaintiffs have raised relating to the nature of the retainer. It is to this issue that the claim for production of documents in the Notice to produce of 9 May 2000 relates. As the dispute about the extent of the retainer appears to have brought proceedings before Mr Hattersley as assessor to an inconclusive end, I cannot allow the possibility to continue that another reference to an assessor might be frustrated."
35 Bryson J then undertook case management which resulted in the making of orders to the following effect when the proceedings came before the court (Windeyer J) on 25 June 2001:
1. Order that the question of the terms of the retainer so far as costs are concerned be determined by the court.
2. Direct that the plaintiff file any amended points of claim on the retainer issue on 16 June 2001 to identify any matters in respect of which Mr Preston claims he would not be liable.
3. Direct the defendants to file amended points of defence on that issue, such document to clearly state the basis of any retainer claim alleged by the defendants to be filed by 6 August 2001.
4. Plaintiffs to file any response to the points of defence by 20 August 2001.
36 Amended points of claim were filed on 13 July 2001. Amended points of defence were filed on 16 August 2001. On 27 August 2001, Windeyer J directed that the matter be placed in the next Registrar's call over on 12 September 2001 for the appointment of a hearing of two to three days. On 14 November 2001, the Registrar fixed the proceedings for hearing by Santow J on 29 April 2002 with an estimate of two days. That fixture was afterwards vacated.
37 As will be seen presently, further amended points of claim filed by the plaintiffs on 15 April 2002 contained allegations of fraud in relation to the creation of a letter bearing the date 19 April 1984. At a directions hearing on 10 May 2002 the court noted the intention of the defendants to rely on a report by a document examiner relating to a carbon copy of the letter dated 19 April 1984. There were also other directions about examination of that carbon copy.
38 The letter dated 19 April 1984 had, by then, come to occupy a prominent place in the plaintiffs' contentions concerning the terms of the defendants' retainer by the plaintiffs. The letter was signed by the second defendant, Leon Nikolaidis, and addressed to Mr Preston. It purported to set out terms of engagement. It appears that the plaintiffs denied receipt of the letter and alleged that it was a forgery, in the sense that it had been created much later than the date it bore, with the carbon copy then inserted into the defendants' files.
39 On 14 June 2002, there were further directions concerning examination of the carbon copy letter by forensic experts. There were similar directions on later occasions.
40 A hearing of the proceedings fixed for 17 and 21 February 2003 was vacated on 21 November 2002. On the same day it was ordered that, save for steps then directed with respect to certain incidental costs issues, the proceedings be stayed "until the conclusion of the criminal trial against Leon Nikolaidis, and the elapsing of any appeal time following the conclusion of that trial, or until further order of the Court". On 11 December 2003, the stay order was varied so as to cause the stay to operate until 27 February 2004. The stay was later extended to 7 December 2004 and subsequently to 1 March 2005.
41 Leon Nikolaidis stood trial in the District Court in late 2007 and was convicted on a single count under s 300(1) of the Crimes Act 1900 of making a false instrument with the intention of using it to induce another person to accept it as genuine and because of that acceptance to do some act to the prejudice of Mr Preston. He was sentenced to a term of imprisonment. An appeal against both conviction and sentence was dismissed on 17 December 2008: Nikolaidis v R [2008] NSWCCA 323. The instrument in question was the letter of 19 April 1984.
42 While the criminal proceedings and the appeal were in progress, these proceedings remained in abeyance. It is not clear that any stay was in place beyond 1 March 2005 but, following the conclusion of the criminal proceedings and the appeal, Bergin CJ in Eq ordered on 12 May 2009 that "the order staying these proceedings is discharged". It is apparent that the matter had come before her Honour for case management following the long period of inactivity. Bergin CJ in Eq also made orders as follows:
"2. I order that the plaintiff produce to the defendant by no later than 25 May 2009 a list of the fee notes or bills that are in question in the litigation setting out in schedule form the amount rendered in the bill and the amount alleged by the plaintiff to be an overcharging of the plaintiff.
3. The plaintiff to provide copies of those bills placed behind the list and schedule referred to in order 2.
4. I order that the matter proceed on pleadings and that the plaintiff file and serve a statement of claim by no later than 8 June 2009 subject to the defendant's entitlement to raise any objection to the matters pleaded by reason of any claims that the matters raised in the pleading have already been dealt with or have been abandoned or are the subject of the statute of limitations."
43 Two things happened after the making of these orders on 12 May 2009. First, the plaintiffs filed a statement of claim on 19 June 2009. Its content will be mentioned presently. Second, the notice of motion with which I am now dealing was filed by the defendants on 2 October 2009. The latter step was obviously taken to raise matters of the kind contemplated by the condition attached to the Chief Judge's order 2.
44 In approaching the present application, I must first identify the claims made in the proceedings. It is useful to trace their development. I have already set out the claims in the summons (see paragraph [4] above). I have also referred to the emergence, over time, of a question about the terms of the defendants' retainer as solicitors for the plaintiffs, that being a matter of central importance to the determination of the matters of quantification of and liability for costs raised by the summons. Further, I have referred to the directions made by Young J on 5 November 1998 for the filing of points of claim and points of defence "on the issue of the terms of the retainer", to subsequent directions concerning points of claim and points of defence and to Windeyer J's order of 25 June 2001 that the question of the terms of the retainer be determined by the court. Bryson J had earlier indicated the need for such a determination.
45 It is pertinent now to note the steps that flowed from the making of the directions and the steps that were taken to plead the respective cases.
46 A document entitled "Points of Claim on the Issue of Retainer" was filed by the plaintiffs on 5 November 1999. They there pleaded what they considered to be the terms of the defendants' retainer, including hourly rates of charge for work done for the plaintiffs and a number of other entities. The pleading concludes, at paragraph 64:
"Further and in the alternative there is no enforceable retainer agreement between any of the above and the defendants."
47 Particulars follow to which it is not necessary to refer.
48 Points of defence were filed by the defendants on 17 December 1999. The defendants either denied or did not admit most of the allegations in the points of claim, including that in paragraph 64. Amended points of claim were filed on 13 July 2001. Amended points of defence were filed on 16 August 2001.
49 On 15 April 2002, Gzell J granted the plaintiffs leave to file further amended points of claim in relation to the terms of the retainer. The grant of leave was made by reference to a particular form of further amended points of claim, being the form constituting the annexure "A" to an affidavit of Mr Colqhoun sworn on 12 April 2002. The court thus expressly allowed the reformulation of the plaintiffs' case in the form set out in that document.
50 In these further amended points of claim (which were filed in court immediately after leave was granted on 15 April 2002), the plaintiffs raised for the first time, in paragraphs 65 to 77, issues about the letter of 19 April 1984. Drawing on material in an affidavit sworn on 27 March 2002 by a former employee of Leon Nikolaidis, the further amended points of claim alleged action of Leon Nikolaidis to bring the letter dated 19 April 1984 (and a carbon copy of it) into existence many years after that date and to insert the carbon copy into one of the defendants' files. There was also an allegation of fraudulent conduct by Leon Nikolaidis in relation to three other identified documents. The further amended points of claim set out under distinct headings particulars of the fraudulent conduct alleged in relation to the 19 April 1984 letter and particulars of the fraudulent conduct in relation to the three other documents. Then followed, under a heading "Orders Sought":
"(1) A declaration that the terms of the retainer agreement between the plaintiffs and the defendants in respect of the matters set out in the Schedule to the Summons are as pleaded herein.
(2) A declaration that the second defendant is guilty of fraudulent conduct as alleged in paragraphs 71, 76 and 77 hereof in respect of the matters pleaded in paragraphs 65 to 70, 72 to 75 and 77 respectively hereof.
(3) A declaration that in the events which have happened the defendants' bills of costs in respect of the matters set forth in the Schedule to the Summons are unenforceable as tainted by the fraudulent conduct of the second defendant.
(4) Such further or other declarations, orders and/or relief as the nature of the case may require.
(5) An order that the defendants pay the plaintiffs costs of the proceedings on an indemnity basis."
51 Further amended points of defence were filed on 19 April 2002, also pursuant to leave granted by Gzell J on 15 April 2002. The defendants denied the allegations in paragraphs 65 to 77. They also said that the plaintiffs were estopped by their conduct from relying on the matters therein alleged.
52 I have already referred to the order made by Bergin CJ in Eq on 12 May 2009 that the matter proceed on pleadings and that a statement of claim be filed. The plaintiffs filed a statement of claim on 19 June 2009. The orders sought are:
"1. An order that the defendants deliver up to the plaintiffs, or alternatively the court, such files of the plaintiffs as remain in the possession of the defendants.