Scope Data Systems Pty Ltd v Agostini Jarrett Pty Ltd

Mr K Andrews - Plaintiff COUNSEL : Mr M Henry - Defendant

Aitken McLachlan Thorpe - Plaintiff SOLICITORS : Middletons Lawyers - Defendant

• 11 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATION LAW LIST

Scope Data Systems Pty Ltd v Agostini Jarrett Pty Ltd.

JUDGMENT 1 His Honour: This is a Notice of Motion filed by the Plaintiff (Scope Data) in proceedings commenced by summons. In its amended form, the Motion seeks the following orders:

1. The Plaintiff have leave to file an Amended Summons in the form of Attachment A.
2. The cost assessment proceedings as detailed in Attachment B be stayed pending the outcome of these proceedings.
3. Such other orders as the Court sees fit.
4. Costs." 2 At the hearing before me, Mr Henry, counsel for the Defendant (Agostini Jarrett), consented to the making of order 1 with the qualification that paragraphs 7, 8, 9 and 10 of the proposed Amended Summons should not be allowed. It will be convenient if I hereafter refer to the draft annexed to the amended Notice of Motion as the Amended Summons. 3 Mr Henry opposed the making of order 2. 4 The proceedings have their genesis in an action in the Local Court at Sydney, which resulted in a Mr David Goman (Mr Goman) as representative partner for B D O Nelson Parkhill, Accountants, securing a judgment against Scope Data for $8,681.15 plus interest (the Local Court judgment). The judgment was given upon a Liquidated Statement of Claim seeking recovery of debt due for the provision of accounting services in litigation in the Supreme Court involving Scope Data. The verdict in the Local Court was given on 23 November 2001 and an order for costs against Scope Data was made subsequently, on 29 July 2002. 5 Agostini Jarrett is a firm of lawyers, apparently first consulted by Scope Data in August 2002, in relation to the possibility of an appeal against the Local Court judgment to the Supreme Court. Such an appeal was launched, purportedly, as of right, on or about 26 August 2002. Mr Goman thereupon sought an order that the appeal be summarily dismissed on the ground that it was commenced out of time. Scope Data, represented by Agostini Jarrett, countered this by moving, on 5 September 2002, for an extension of time to appeal pursuant to SCR Pt 51 B r 6 (2)(a). 6 On 14 March 2003, Master Malpass dismissed the appeal from the Local Court judgment and refused an extension of time. 7 In the meantime, Mr Goman caused a Statutory Demand to be served on Scope Data pursuant to s.459 G of the Corporations Act 2001(Commonwealth). In a judgment delivered on 13 March 2003, Barrett J dismissed, with costs, an application by Scope Data to set aside the demand. In those proceedings, Scope Data was again represented by Agostini Jarrett. 8 There were further proceedings in the Supreme Court between Mr Goman and Scope Data, in that, upon the expiration of the Statutory Demand, Mr Goman made application to wind up Scope Data. The winding up application was contested and there was a hearing before Campbell J. Before His Honour delivered judgment, however, the debt on which the winding up application was based, namely, the amount due under the Local Court judgment, including costs as assessed, was paid. In the result, Campbell J dismissed the application to wind up Scope Data but in a judgment delivered on 23 April 2004 ordered that Scope Data pay Mr Goman's costs. In the proceedings before Campbell J, Scope Data was not represented by Agostini Jarrett but by another firm of solicitors. 9 By the Amended Summons, as it now appears, Scope Data seeks relief against its former solicitors, Agostini Jarrett, in a variety of forms. In respect of the proceedings before Barrett J and before Master Malpass, it seeks declarations and orders pursuant to s198 M and s198 N of the Legal Profession Act, alternatively, pursuant to s76 C of the Supreme Court Act, alternatively, pursuant to Pt 52A r 43(1) of the Supreme Court Rules. All that relief is encompassed by paragraphs 1 to 6 inclusive and, as earlier indicated, Mr Henry does not oppose those paragraphs. I pause to comment that it is not immediately apparent how the proceedings fall within sections 198 M and 198 N, in that, on the face of it, they do not seem to constitute claims for damages or defences to claims for damages. 10 Paragraphs 7,8,9 and 10 of the Amended Summons, however, raise different issues. They are in the following form:

7. An order disallowing the costs as between (Agostini Jarrett) and (Scope Data) in (Agostini Jarrett) acting in Local Court of NSW at Sydney proceedings No 9308 of 2002. 8. An order directing (Agostini Jarrett) and/or the Second Defendant (Ms Jarrett) to repay to (Scope Data) any costs which (Scope Data) has paid and which are disallowed by order of this Court. 9. A declaration that (Ms Jarrett) was not entitled to, and had a duty not to, support the Supreme Court proceedings No. 6360 of 2003 and not to hamper or prevent the orderly resolution of those proceedings. 10. An order that (Agostini Jarrett) and/or (Ms Jarrett) pay all or part of the costs incurred by (Scope Data) and also indemnify (Scope Data) against all or part of the costs claimed by (Mr Goman) in Supreme Court proceedings No. 6360 of 2003 against (Scope Data)." 11 Not surprisingly, Agostini Jarrett's solicitors sought particulars of the cause or causes of action underlying the above paragraphs as a prerequisite to considering whether or not the amendments would be agreed to. In reply, Scope Data did little more than refer to affidavits of its director, Mr Peter Gorczynski. Such a response, in my view, was wholly inappropriate. 12 It emerged, however, during the hearing of the Motion before me, as I understand it, that the underlying cause of action to the relief sought in paragraphs 7 and 8 is an alleged breach of contract and that the cause of action, said to support paragraphs 9 and 10, is an allegation of breach of fiduciary duty. The proceeding in the Local Court 9308 of 2002 referred to constituted an action by solicitors Beilby, Poulden, Costello against Scope Data for recovery of their costs of acting for Scope Data in the action which culminated in the Local Court judgment. Supreme Court proceedings 6360 of 2003 were the winding up proceedings which led to the orders of Campbell J, referred to above. 13 It may be that these proceedings should have been commenced by Statement of Claim, pursuant to SCR Pt 4 r 2, but this, at most, would constitute an irregularity curable by s 81 of the Supreme Court Act. The complicated litigation has already extended well beyond any bounds set by the Local Court judgment for a comparatively small amount and it is highly desirable, in my view, that further interlocutory proceedings be kept to a minimum. To that end, as indicated during the hearing, I believe that justice will be best served if I direct that Scope Data provide particulars of the cause of action underlying paragraphs 7 and 8 of the Amended Summons and that Scope Data be required to provide points of claim in respect of the cause of action underlying paragraphs 9 and 10. 14 Draft particulars of the cause of action underlying paragraph 7 were prepared by Mr Henry during the course of the hearing of the Motion and were handed to Mr K Andrews, counsel for Scope Data. I think it appropriate that I order that those particulars be provided. It seems clear that the relief sought in paragraph 8 of the Amended Summons is ancillary to paragraph 7 and does not envisage a separate cause of action.

15 There remains for consideration, apart from costs, the order sought in paragraph 2 of the amended Notice of Motion. According to the evidence, Costs Assessor, Mr C J Boyd-Boland, has under consideration 3 applications for costs assessment by Agostini Jarrett, against Scope Data, its former client. Mr Andrews submits that there should be a stay of the assessment proceedings. If not, so it was contended, the assessor may issue assessments to Agostini Jarrett which, if lodged in a competent court pursuant to s208 J of the Legal Profession Act, could give rise to a judgment or judgments potentially conflicting with the judgment to be given in this case. Moreover, Mr Andrews submitted that as a matter of convenience, the costs assessor should be prevented from performing work which, ultimately, might have no utility. 16 On the other hand, Mr Henry submitted that as Mr Boyd-Boland is not a party to these proceedings the Court should not order that he be restrained from proceeding to assess costs in accordance with the obligations imposed upon him by the relevant references. 17 There is, I think, much to be said for Mr Andrews' submission that it is undesirable that Mr Boyd-Boland complete his assessments for the reasons which he advanced. Apart altogether from the possibility that Mr Boyd Boland will perform work rendered useless by the result of these proceedings, it is desirable that the possibility of conflicting judgments be avoided. 18 The matter of competing judgments was discussed in Port of Melbourne Authority v Anshun Pty Ltd (1981) 55 ALJR 621. At page 626 Gibb CJ, Mason and Aickin JJ said: "It has generally been accepted that a party will be estopped from bringing an action which if it succeeds will result in a judgment which conflicts with an earlier judgment. In this respect, the discussion in Brewer v Brewer (1953) 88 CLR 1 is illuminating. There it was held that the wife's omission to plead matters which would have constituted a discretionary bar to her husbands suit for dissolution of marriage on the ground of adultery did not estop her from raising those matters in subsequent proceedings for maintenance. Fullagar J with whom Dixon CJ agreed, said (page 15), "In Hoystead's case (1926) AC 155; (1925) 37CLR 290 the Commissioner was not merely seeking to raise on the second appeal a point which he might have raised but had omitted to raise on the first appeal. He was seeking to raise a point which could not be decided in his favour consistently with the decision of the first appeal. The point had not been argued on the first appeal and there was therefore no expressed decision on the point. But the Commissioner had allowed it to be assumed against him and the assumption was fundamental to the decision in the sense that, if the assumption had not been made, the decision must have been different. As Somervell LJ said - "he was therefore seeking to obtain an order which was on the face of it and in form in direct conflict with the order which had been made previously." 19 At 628 Brennan J commented to the same effect: "The recovery of a judgment which declares or enforces rights or liabilities between the parties inconsistent with an earlier judgment binding upon them is precluded by the operation of the rules of estoppel and resjudicata. These rules may operate concurrently in particular cases according to the causes of action litigated and the issues arising in each proceeding." 20 Mr Boyd-Boland is not part of the Supreme Court and is not, when acting as an assessor, an officer of the court. It is clear that in making his assessments he has no power to decide all the issues raised in this case (see for instance Ryan v Hansen 2000 NSWSC 354; Muriniti v Lyons 2004 NSWSC 135: and Minerals Corporation Ltd v Abbot 2004 NSWSC 246). It may be, nonetheless, that any judgment arising from the filing of his assessment certificate in a court of competent jurisdiction could give rise to an issue estoppel or constitute res judicata. Bell J seemed to contemplate the possibility in Minerals Corporation Ltd (see paragraph 47). 21 In Minerals Corporation Ltd, however, the Costs Assessor was a party to the proceedings and the relief sought could readily be given. In this case, Mr Boyd-Boland is not a party to the proceedings and, in my opinion, for that reason it is inappropriate to order that he be restrained from completing the assessments of costs. However, in the absence of any undertaking such as was given to Bell J in Minerals Corporation Ltd, it is, I think appropriate to restrain Agostini Jarrett from filing any certificate issued by the costs assessor, Mr Boyd-Boland, in a court of competent jurisdiction until after these proceedings have been finalised, or until further order of the court. 22 As to costs, although in one sense Scope Data has substantially succeeded upon the Notice of Motion, it has done so on terms, which I regard as significant. The particulars provided in respect of the relief sought in paragraphs 7,8,9 and 10 of the Amended Summons were, in my opinion, wholly inadequate. In my view, it was therefore appropriate that Agostini Jarrett oppose the amendments, at least to that extent. Because of a failure to join the costs assessor, Scope Data has had only limited success upon its application for a stay. 23 In all the circumstances, therefore, I think that Scope Data should pay the costs of the Motion. As there may be other matters arising out of the orders which I intend to make, I will give both parties liberty to apply on 48 hours notice to the other. 24 I make these orders:

1. I grant leave to Scope Data to file and serve within 14 days an Amended Summons in accordance with the draft annexed to the amended Notice of Motion filed 20 October 2004.
2. I order Scope Data within 21 days to furnish particulars of the cause of action underlying paragraphs 7 and 8 in the Amended Summons, in accordance with the draft request for particulars handed by Mr Henry of counsel to Mr Andrews of counsel during the hearing of the Motion.
3. I order Scope Data within 21 days to file and serve points of claim of the cause of action underlying the relief sought in paragraphs 9 and 10 of the Amended Summons.
4. I order that pending the final disposal of these proceedings or further order of the court, Agostini Jarrett be restrained from filing in a court of competent jurisdiction any costs certificate issued by Costs Assessor, Mr C J Boyd-Boland upon the cost assessment proceedings referred to in the amended Notice of Motion.
5. I grant each party liberty to apply on 48 hours notice to the other.
6. I order Scope Data to pay Agostini Jarrett's costs of the Motion.

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