CIVIL PROCEDURE - Summary disposal - Dismissal of proceedings - No reasonable cause of action disclosed - Where plaintiff failed to provide a properly pleaded statement of claim.
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CIVIL PROCEDURE - Summary disposal - Dismissal of proceedings - No reasonable cause of action disclosed - Where plaintiff failed to provide a properly pleaded statement of claim.
Judgment (2 paragraphs)
[1]
Judgment
This judgment is concerned with the determination of a number of notices of motion filed by the parties. It will only deal with the relief sought in the motions that was the subject of submissions at the hearing. The plaintiff, in particular, sought many orders that will not need to be considered after the primary issues have been resolved. The issues are, in substance, whether the Court should dismiss the plaintiff's proceedings, or whether it should give the plaintiff a further opportunity to file a statement of claim, after the defendant has been required to provide the plaintiff with certain information. It will also be necessary to consider the costs order that should be made in these proceedings.
At all times the plaintiff, Mr Prichard, has appeared as an unrepresented litigant. The defendant, Mr Fryer, has been represented by a barrister, Mr Philip Sharrock, on a direct access basis.
As will be explained in more detail below, Mr Prichard no longer seeks the relief against Mr Fryer that he initially sought in his summons. The Court has already refused Mr Prichard leave to file one draft statement of claim. On 18 April 2017, the Court ordered Mr Prichard to serve any further draft statement of claim by 16 May 2017. Mr Prichard seeks an order setting aside that order, and a further order giving him an extended time to serve his draft statement of claim. If the Court rejects that claim by Mr Prichard, Mr Fryer seeks an order dismissing Mr Prichard's claim on the basis that he no longer seeks the relief in his summons, and he has not pleaded any alternative claim for relief.
Pritchard v Fryer [2017] NSWSC 1752 | Case summary | Zoe
Mr Fryer also seeks an order under s 98(4)(c) of the Civil Procedure Act 2005 (NSW) that his costs of the proceedings be paid by Mr Prichard on a gross sum basis. Mr Fryer submitted that Mr Prichard's conduct would justify the Court in ordering that he pay Mr Fryer's costs on an indemnity basis, but Mr Fryer has not sought an order for costs on that basis. Rather, Mr Fryer has asked for costs on a basis where Mr Sharrock has not claimed for disbursements including travel (although he was entitled to do so under his cost disclosure and agreement with Mr Fryer dated 5 April 2016), and has not claimed for Mr Sharrock's appearance before the Court after 30 May 2017. Mr Fryer has based his claim on the fact that, as Mr Sharrock has accepted a direct access brief, Mr Fryer's overall costs have been reduced because he has not retained a solicitor as well as Mr Sharrock to attend to all aspects of the matter. Furthermore, Mr Sharrock has rendered his costs based upon a rate of $350 per hour, which Mr Fryer submits is in relative terms not a high or unreasonable hourly rate.
Mr Fryer provided written submissions to the Court dated 1 May 2017 which stated the total amount of his legal fees at that date as being $32,515. At the hearing on 14 August 2017, Mr Sharrock handed up a tax invoice dated 24 May 2017 which described the total amount that he had invoiced to Mr Fryer as being $36,652. This invoice was marked for identification for the purpose of dealing with the costs of the proceedings.
Unusually, however, Mr Fryer's affidavit dated 9 June 2017, which accompanied the notice of motion seeking dismissal of Mr Pritchard's claim, had annexed to it an invoice from Mr Sharrock dated 9 June 2017, which stated the total amount of Mr Sharrock's costs as being $40,040. In his affidavit, Mr Fryer claimed that his total legal costs as at 9 June 2017 were $40,815, comprising of Mr Sharrock's costs plus the fees for filing two notices of motion. Mr Fryer annexed a tax invoice for $386 in respect of a notice of motion filed on 15 June 2016, and said that he would bring the other invoice to Court, but did not tender the other invoice at any time in the proceedings. The evidence before the Court therefore establishes that Mr Fryer has incurred $40,426 in legal fees, being the sum of Mr Sharrock's invoice for $40,040 and the invoice for $386 for the 15 June 2017 notice of motion. I will treat Mr Fryer's claim for costs as a claim for this amount.
It will be necessary to provide a brief history of these proceedings in order to show the nature and extent of the legal work undertaken by Mr Sharrock for which Mr Fryer has been required to pay.
Mr Prichard commenced the proceedings by filing a summons on 23 March 2016. He sought specific performance of what he described as the "Agreement". The summons did not indicate the date or terms of the agreement, other than to say that it was between the parties. Mr Prichard has since explained to the Court that the contract concerned a device for eliminating the hum produced by electric guitars which Mr Prichard understood Mr Fryer had developed and agreed to supply to Mr Prichard.
After a number of directions hearings before the Registrar, on 15 November 2016 an order was made by the Registrar setting the proceedings down for hearing before me for three days commencing on 18 April 2017.
On 6 March 2017, an order was made for a pre-trial hearing before me on 15 March 2017.
On that date, Mr Prichard advised the Court that he did not wish to proceed with his claim for specific performance, because he asserted that some event had occurred that would make that relief futile. My understanding is that Mr Prichard came to believe that Mr Fryer did not have the intellectual property rights to develop and supply the hum cancelling device. He said that he wanted to claim damages from Mr Fryer.
I ordered Mr Prichard to serve his proposed statement of claim by 24 March 2017, and stood the matter over for further pre-trial directions on 30 March 2017.
Mr Prichard served a draft statement of claim on 24 March 2017. A material aspect of the draft statement of claim was that Mr Prichard sought to join Mr Sharrock as the second defendant, and made various allegations against him personally.
On 30 March 2017, Mr Prichard indicated from the bar table that he would remove his claim against Mr Sharrock from his draft statement of claim, and I directed Mr Prichard to serve a notice of motion by 31 March 2017 seeking leave to file a statement of claim, and made the notice of motion returnable on 6 April 2017.
On that date, I made an order vacating the hearing that had been fixed for 18 April 2017, and made that the date for hearing Mr Prichard's motion to file a statement of claim.
On 18 April 2017, I gave an ex tempore judgment in which I refused Mr Prichard leave to file the draft statement of claim, for reasons including that it was unintelligible and did not plead any reasonable causes of action. I indicated on that day that in due course Mr Prichard's claim for specific performance would have to be dismissed, and he would also be made subject to an order that he pay Mr Fryer's costs of the day. However, essentially on the ground that Mr Prichard was a litigant in person, I gave him one more opportunity to serve a draft statement of claim in a form that was appropriate to be filed. By order 1, I directed Mr Prichard to serve a further draft statement of claim by 16 May 2017. I vacated the hearing dates of 19 and 20 April 2017. I gave directions for the exchange of submissions on the issue of the costs of the proceedings. I stood the matter over to 30 May 2017.
On that date, Mr Prichard did not appear when the matter was called outside Court. Mr Sharrock provided to the Court the terms of a text message that Mr Prichard had previously sent to Mr Fryer, in which Mr Prichard had said in part: "I am not going to take any further part in either of the legal proceedings". The other legal proceedings referred to were proceedings in the Local Court, which I will mention further below. In addition, Mr Prichard made expletive-laden threats against both Mr Fryer and Mr Sharrock. I gave Mr Fryer leave to file a notice of motion for dismissal of Mr Prichard's claim, and made the notice of motion returnable on 15 June 2017. I also stood over notices of motion which Mr Prichard had filed on 16 February, 31 March and 24 May 2017, in which he had sought sundry relief, to 15 June 2017.
Mr Fryer filed a notice of motion on 9 June 2017 seeking an order that the proceedings be dismissed.
On 15 June 2017, I stood Mr Fryer's notice of motion over to 20 July 2017 and made directions, and on the latter date, I fixed all of the motions to be heard on 14 and 15 August 2017.
It is not clear when, and in what circumstances, but Mr Prichard provided to Mr Fryer and to the Court a further draft statement of claim. This draft also named Mr Sharrock as a second defendant, but it deleted the facts that had been previously alleged to support a claim against him. The most notable feature of the draft was that many of the allegations were described as "incomplete", and many other aspects had not been completed, which was signified by the use of "**". After considerable confusion at the hearing, it became apparent that the draft statement of claim being discussed was an earlier version of the document, and that Mr Prichard had not served any further draft statement of claim in compliance with order 1 made on 18 April 2017.
At the hearing on 14 August 2017, Mr Prichard informed the Court that he wanted to file a further statement of claim against Mr Fryer, but he could not do so unless Mr Fryer first provided Mr Prichard with information that detailed all of the guitars and guitar parts and accessories that Mr Prichard had delivered to Mr Fryer over time for the purpose of repair and other works by Mr Fryer, who is a luthier. Mr Prichard said that he had received invoices from Mr Fryer for repair work and storage costs. Mr Prichard denied that he was liable to pay Mr Fryer the amounts claimed. He said that Mr Fryer was claiming a lien over the goods pending payment. Mr Prichard also said, without any comprehensible explanation, that he wished to assert various statutory claims against Mr Fryer, such as for misleading and deceptive or unconscionable conduct. Mr Prichard's position was that he could not formulate his claim without first being provided with additional information by Mr Fryer. Mr Prichard did not articulate in an intelligible way why it was that he could not plead his claim without the additional information.
It emerged during the hearing that on 16 November 2016, Mr Prichard had already instituted proceedings No 343068 of 2016 in the Local Court of New South Wales against Mr Fryer, in which he sought damages for detinue in respect of various guitars, guitar parts and accessories. The Court was told something about the history of those proceedings. The extent to which the Local Court proceedings overlapped with the proceedings that Mr Prichard wished to pursue in the Supreme Court was not entirely clear, but I am satisfied that there was at least a substantial degree of overlap. Furthermore, the alleged lack of information which formed the basis of Mr Prichard's explanation as to why he had not complied with order 1 made on 18 April 2017 had not stopped him drafting the Local Court statement of claim.
It is neither necessary nor indeed possible for the Court on this application to explain in detail why it has rejected Mr Prichard's argument. The reason is largely because the argument was not articulated coherently. I do not accept that Mr Prichard has been prevented by lack of information from drafting a statement of claim that complies with the rules, assuming that he has a reasonable cause of action capable of being pleaded against Mr Fryer. Furthermore, I am satisfied that at least in large measure the claim that Mr Prichard wishes to pursue against Mr Fryer overlaps with the existing proceedings in the Local Court.
Accordingly, I dismiss Mr Prichard's claim for an order setting aside order 1 made on 18 April 2017, and the consequential claim for a new order giving him an opportunity to serve a further draft statement of claim.
Consequently, Mr Prichard's position is that he no longer pursues the claim for relief in the summons, and he has not been given leave to file any statement of claim claiming alternative relief. The result is that an order should be made in favour of Mr Fryer dismissing Mr Prichard's proceedings.
Mr Fryer is entitled to an order that Mr Prichard pay his costs of the proceedings. The question is whether those costs should be assessed in the ordinary way, or whether as sought by Mr Fryer the Court should make a gross sum costs order in the amount set out in Mr Fryer's written submissions.
Mr Prichard did not make any submission to the effect that the amount claimed or any part of it related to legal work that had not been done, or was unnecessary or unreasonable, or that any individual amounts or the aggregate were excessive.
Although the evidence in support of Mr Fryer's quantification of his legal costs was relatively sparse, in my view it was adequate given the relatively small sum involved, and as I have said, it was not challenged by Mr Prichard, and Mr Prichard did not complain that the evidence was inadequate.
Based upon my own experience, I am satisfied that the amount that has been claimed for Mr Fryer's legal costs is reasonable and relatively conservative, and is less by a significant amount than the actual total of those costs. (The Court was advised by Mr Sharrock in argument that the costs up to and including the hearing on 14-15 August 2017 amounted to $57,255 including GST).
The principles that are to be applied to decide whether the Court should make a gross sum costs order, and if so, how the Court should determine the proper amount of those costs, have been authoritatively and conveniently set out by Beazley JA (as her Honour then was), with the agreement of Giles and Whealy JJA, in Hamod v New South Wales [2011] NSWCA 375, as follows:
[813] I have already set out the relevant provisions of s 98. The discretion thereby conferred upon the court is not confined and may be exercised whenever the circumstances warrant its exercise, having regard to the scope and purpose of the provision: Harrison v Schipp [2002] NSWCA 213; 54 NSWLR 738 per Giles JA at [21]-[22]. In Harrison v Schipp, Giles JA considered that the discretion in s 98(4) may be exercised where the assessment of costs would be protracted and expensive and, in particular, if it appeared that a party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment. However, his Honour stated, at [22]:
The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available.
[814] See also Wentworth v Wentworth (Court of Appeal, 21 February 1996, unreported). The courts have typically applied a discount in assessing costs on a gross sum basis: Ritchie's Uniform Civil Procedure NSW, LexisNexis, Sydney, 2005 to date, "Civil Procedure Act", at [s 98.65]; Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788; Idoport Pty Ltd v National Australia Bank Ltd; Lorenzato v Lorenzato (No 2) [2011] NSWSC 790 per Black J.
[815] In Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; 135 ALR 160, von Doussa J noted that the specified gross sum costs procedure was particularly useful in complex cases, that the power must be exercised judicially and only after giving the parties an adequate opportunity to make submissions, and that before exercising the power the court should be confident that the approach taken to estimate costs is fair, logical and reasonable.
[816] The terms of s 98(4), together with the more general considerations reflected in the Civil Procedure Act, ss 56(1), 57(1)(d) and 60, suggest the factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred (for example, Harrison v Schipp); the degree of any disproportion between the issue litigated and the costs claimed; the complexity of proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liability: Ritchie's Uniform Civil Procedure NSW at [s 98.45].
[817] The exercise of the power conferred by s 98(4) is particularly appropriate where the costs have been incurred in lengthy or complex cases and it is desirable to avoid the expense, delay and aggravation likely to be involved in contested costs assessment. This may arise either from the likely length and complexity of the assessment process: Beach Petroleum NL v Johnson (No 2) at 120; Charlick Trading Pty Ltd v Australian National Railways Commission; Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006; or from the likelihood that the additional costs of formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability in any event: Harrison v Schipp; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788 at [90], [194]-[195]; Hadid v Lenfest Communications Inc [2000] FCA 628.
[818] The power may also be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings: Leary v Leary [1987] 1 WLR 72; [1987] 1 All ER 261; Sony Entertainment (Aust) Ltd v Smith; Microsoft v Jiang (2003) 58 IPR 445; [2003] FCA 101; Ritchie's Uniform Civil Procedure NSW at [s 98.60]).
[819] The assessment of any lump sum to be awarded must represent a review of the successful party's costs by reference to the pleadings and complexity of the issues raised on the pleadings; the interlocutory processes; the preparation for final hearing and the final hearing: Smoothpool v Pickering [2001] SASC 131. In the exercise of its discretion the court is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment: Harrison v Schipp at 743; Hadid v Lenfest Communications Inc at [35]; Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1 at 5 ; [1999] FCA 673.
[820] The costs ordered should be based on an informed assessment of the actual costs having regard to the information before the court (for example, by relying on costs estimates or bills): Beach Petroleum NL v Johnson (No 2); Leary v Leary; Harrison v Schipp at 743 ; Sparnon v Apand Pty Ltd (FCA, 4 March 1998, unreported). The approach taken to estimate the costs to be ordered must be logical, fair and reasonable: Beach Petroleum NL v Johnson at 164-165; Hadid v Lenfest Communications Inc at [27]; Harrison v Schipp at 743. This may involve an impressionistic discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment: Leary v Leary at WLR 76 per Purchas LJ; Beach Petroleum NL v Johnson (No 2) at 123; Auspine Ltd v Australian Newsprint Mills Ltd at 164-165.
In my view this is an appropriate matter in which to order Mr Prichard to pay Mr Fryer's costs on a gross sum basis. In my view Mr Prichard's conduct in the running of his case gives good reason to fear that an assessment of costs in the ordinary way would be protracted and expensive in relation to the amount of costs claimed. I am also satisfied that Mr Prichard's conduct has unnecessarily contributed to the costs of the proceedings. Essentially, Mr Prichard has achieved nothing by these proceedings; he has never demonstrated that he has any arguable claim against Mr Fryer; and he has put Mr Fryer to unnecessary expense and inconvenience.
As the now President observed in Hamod, the courts have typically applied a discount in assessing costs on a gross sum basis. I am satisfied that the amount of $40,400 (which was supported by the invoices annexed to Mr Fryer's affidavit dated 9 June 2017, rounded down) represents a more than adequate discount when compared to the $57,255 that Mr Sharrock described as his total costs for the proceedings. Although Mr Fryer did not tender evidence of his total costs, I am satisfied that his additional costs after mid-June 2017 would have been substantial.
The Court will therefore make the following orders:
1. Order that the plaintiff's claim be dismissed.
2. Order the plaintiff to pay the defendant's costs in the gross sum of $40,400.
[2]
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Decision last updated: 17 April 2018