Qasim v Mitchell & Ors.

The 'involvement' of Fred Klein

1. Mr Klein was, as I mentioned, the first plaintiff's accountant. In his affidavit Mr Klein describes the first plaintiff as "a former client of the accounting practice in which I work. I have been involved preparing taxation returns for the first plaintiff in her own personal capacity and for her superannuation fund": affidavit of Fred Klein affirmed 5 July 2022, par 5. Later, in that affidavit, he explains that his "only role at the relevant times was to prepare accounting and taxation records for the plaintiff…": affidavit of Fred Klein affirmed 5 July 2022, par 16. I accept that evidence.
2. In relation to the current proceedings, Mr Klein's evidence is clear: he has no interest in the proceedings, he did not consent to being a party to them and he did not authorise the first plaintiff to commence proceedings on his behalf: affidavit of Fred Klein affirmed 5 July 2022, pars 2.6, 9, 10, and 16. I accept that evidence.
3. To the extent that Mr Klein may have signed documents in relation to the proceedings - possibly submissions filed on 27 October 2021 - his evidence is that he did so based upon what he was told by the first plaintiff. Importantly he said, and I accept, that he did not understand that he was a plaintiff in the proceedings and did not receive any legal advice when he signed the document: affidavit of Fred Klein affirmed 5 July 2022, pars 12-14. He also said, and I accept, that he relied upon what he was told by the first plaintiff about why he was required to sign the document: essentially because he was told by the plaintiff that "it will assist us getting the records": affidavit of Fred Klein affirmed 5 July 2022, par 13. Although it was not argued that there was ratification by Mr Klein, I do not accept that on either occasion that there was.

The orders sought

1. By notice of motion dated 4 July 2022, Mr Klein seeks an order that he be removed from these proceedings and, further, that the court varies the orders such that the orders for costs made on 30 May and 13 September 2022 be made only against the first plaintiff.
2. The first, third and fifth defendants although served with Mr Klein's notice of motion have indicated, in substance, that they will submit to the orders of the court. The fourth defendant has appeared today and he too submits to the orders of the court.
3. The orders sought by Mr Klein should be made. This follows, in my view, from the principles identified and discussed in Hoskins v Van Den-Braak (1998) 43 NSWLR 290 ('Hoskins'). In that case, Mason P (Priestley and Beazley JJA agreeing) held (at 293): "An action brought in the name of a plaintiff without that party's consent… will be stayed and struck out on application of that party, even if application is first made after trial and judgment… This is because the unauthorised action is a nullity, albeit one capable of ratification by the party wrongly joined… Where proceedings are commenced in the name of several parties but without authority from one of those parties, then the name of the wrongly added party will be struck out, even after final judgment…"
4. On the findings that I have made above - that is, that the proceedings were brought without Mr Klein's consent and without his authority - Mr Klein is entitled as of right to not only have the orders made against him discharged, but to be removed as a party from the proceedings.

Costs

1. Mr Eardley, who appears for Mr Klein, seeks an order that the first plaintiff pay Mr Klein's costs of the motion and of the proceedings and that those costs be payable on an indemnity basis on and from 15 June 2022.
2. Specifically, Mr Eardley relies upon an email sent to the first plaintiff dated 15 June 2022, Exhibit B, which, by way of summary, sought to have Mr Klein extricated from the proceedings and to have orders that were made against him discharged.
3. That offer was not accepted. In my view, Mr Klein is entitled to costs of the proceedings including his notice of motion and they should be on an indemnity basis on and from 15 June 2022. They should be so because of the offer that was contained within the email dated 15 June 2022 provides a proper basis for costs in this case to be assessed on an indemnity basis.
4. Separately, and in addition, on the findings that I have made, Mr Klein should never have been added as a party and should not have been put to the cost and expense of having to remove him from the proceedings that the first plaintiff filed in this Court on 30 September 2021.
5. In Hoskins, Mason P (at 293) identified that in cases where proceedings have been commenced in the name of a party without their consent and without their authority gave rise to an entitlement "to recover costs on the indemnity basis from a solicitor who wrongly warranted authority to commence the proceedings".
6. Although the situation there concerned where a solicitor had commenced proceedings without authority, there is no point in principle why it would not apply to the situation here.
7. In my view, therefore, the first plaintiff should pay the second plaintiff's costs on and from 15 June 2022 on an indemnity basis.

Orders

1. I make the following orders: 1. Order that all references in the orders made on 30 May 2022 and 13 September 2022 to plaintiffs are to be read "first plaintiff", with the consequence that all orders for costs made by the Court on 30 May 2022 and 13 September 2022 are to be borne by the first plaintiff, Shaheen Qasim. 2. Upon entry of order 1, order pursuant to Uniform Civil Procedure Rules 2005, rule 6.29 and/or the inherent jurisdiction of the Court, the second plaintiff be removed from the proceedings bearing number 2021/279779. 3. Order that the first plaintiff Shaheen Qasim pay the costs of Fred Klein of and incidental to the proceedings 2021/279779. 4. Those costs are to be payable on and from 15 June 2022 on an indemnity basis. 5. Order that the summons filed 30 September 2021 be listed for directions before the Registrar on 17 October 2022. 6. Direct that the first plaintiff file an affidavit of service evidencing service of the summons filed 30 September 2021 on the sixth defendant by 4pm 14 October 2022.

Amendments 10 November 2022 - Format DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 November 2022