Shaw v Yarranova Pty Ltd & Anor [2012] VSCA 189

Court of Appeal (Vic)|2012-08-16|Before: Hargrave J, Warren CJ

The applicant contended that Beach J erred in not conducting an assessment pursuant to s 91 of the Legal Practice Act 1996 to determine the extent, if at all, that the respondents' solicitors had failed to make the disclosures required under the Act and to then reduce the costs. He said on the leave application that the order for production was wide enough to cover such documents and that as nothing was produced it follows that there had been no requisite disclosure. The respondents submitted that the documents did not fall within the order for production as these were not documents that set out the method by which the respondents' costs had been calculated. The respondents pointed to the fact that the order had been made in the context of a request for 'relevant retainer letters, costs agreements, invoices, proof of payments of invoices and actual costs paid' hence it was not within the contemplation of the respondents' solicitors that disclosure documents were being sought. The respondents contended that the applicant had not claimed that it had been established that there was any failure by the respondents' solicitors to disclose to the respondents any information required under the Act. The applicant's case was that 'if there has been no costs disclosure, the court should conduct an assessment of the costs and reduce them in accordance with s 91 and s 93.'
Even if there was evidence from which it could be inferred that there had been non-compliance with s 86 of the Legal Practice Act 1996, and assuming that the applicant falls within the description of persons who could apply for an assessment of the respondents' solicitors' bill of costs under s 115(1) of that Act, there had, by the time of this submission before Beach J, been an assessment and a review of all the relevant bills of costs. It was not for Beach J to have undertaken such a task, nor could his Honour have ordered a further assessment except in 'special circumstances.'[39] A complaint by the applicant, as the party who has been ordered to pay the costs of the proceeding, that there may have been non-compliance with the disclosure requirements of the Act, would not in our opinion constitute a 'special circumstance' warranting a further assessment.

19 Mr Shaw's proposed grounds of objection in relation to all items are:

The taxations proceeded on the wrong principles founded on:

The [applicant] was denied procedural fairness & natural justice when the court refused to order production of disclosure documents (after admission of their existence before the Court of Appeal in Feb 2011) to determine whether they would comply with orders of AsJ Wood 19 Feb 2010. 2. The [respondents'] failure to file and serve an affidavit exhibiting existing (admitted) cost disclosure documents and other related materials in compliance with orders of AsJ Wood dated 19 Feb 2010 for taxation of costs in previous related costs taxations.

Reliance on false & misleading evidence contained in the [respondents'] solicitor [sic] affidavit 3 Dec 2009 tendered in separate proceeding.
The court did not account for the fresh evidence contained in the [applicant's] affidavit & exhibits dated 02 October 2011 and provide an assessment on how this evidence would not justify production of some of all of the documents requested in the notices of objections or would not be relevant to the issues of retainer & extent of costs liability of the [respondents].
The [applicant] was denied the opportunity to assess the relevant disclosure statements and documents requested and make submissions challenging the existence of a Corporate retainer, extent of liability under the Corporations Law, special fee arrangements between the solicitors (as major shareholders of the [respondent] companies) that would reduce liability and reduction of the bill in accordance with the indemnity principle and/or s 86, 87 & 91 of the Legal Practice Act 1996.
The court erred by not recognising its authority to assess & order reduction of costs payable by the [applicant] due to the failure of the solicitors to comply with the disclosure requirements of s86, 87 & 91 of the Legal Practice Act 1996.
The [applicant] was denied natural justice and/or procedural fairness by the [respondent] companies' refusal, neglect and/or failure to produce documents relating to the proof of existence of retainer and/or the extent of liability to the solicitors for legal costs and disbursements.
On the available evidence the Court cannot be satisfied the total amount of costs allowed in each respective order did not exceed the [respondents'] actual liability to their lawyers & counsel.
The [applicant] seeks to tender additional evidence to support a reconsideration of the orders.

In place thereof, a total amount not exceeding the [respondents'] actual liability to their lawyers & counsel.

20 It is immediately apparent on the face of these objections that they seek to raise issues that either have been raised in previous litigation between the parties and determined adversely to Mr Shaw or that could have been and should have been agitated in the earlier litigation.

21 Objection 2 refers to Mr Shaw's affidavit dated 2 October 2011. That affidavit makes numerous allegations of fraud and dishonesty against the respondents and their solicitors. These allegations do not appear to have a proper basis. Many of the allegations are clearly misconceived. For example, Mr Shaw alleges that ABL partners are indirect shareholders of one of the respondents. He deposes that the ABL partners are shareholders of ABL Fiduciary Corporation P/L, which is a 50% shareholder in Hillgarth P/L, which is in turn a 50% shareholder of Newquay.[6] This shows, Mr Shaw claims, that ABL partners are 50% owners of Newquay.[7] From this alleged fact Mr Shaw then seeks to draw further inferences of dishonesty and impropriety. In fact, the company searches exhibited by Mr Shaw show that Hillgarth does not hold its shares in Newquay beneficially. Similarly, ABL Fiduciary Corporation does not hold its shares in Hillgarth beneficially either. So there is nothing in the documents provided by Mr Shaw to suggest that any of the ABL partners have any beneficial interest in the respondents.

22 Much of the material in Mr Shaw's affidavit seeks to attack the credibility of Mr King, the ABL partner who deposed in previous costs litigation that 'ABL has never entered into any agreement or arrangement... to the effect that either or both of the [respondents] will not under any circumstances whatsoever be liable for ABL's fees for providing legal services to the [respondents]'. Mr King's evidence was accepted by Beach J. Mr Shaw cross-examined Mr King in a hearing before Harper J, although he was required to confine the cross-examination to issues going to the 'financial position' of the respondents. Mr Shaw's attempt to appeal against the decision of Beach J failed. It is too late now to attempt to challenge Mr King's credibility.[8]

23 Insofar as Mr Shaw's notice raises issues that have not already been determined between the parties, they are all issues that ought to have been properly raised in earlier costs litigation between the parties.

24 Mr Shaw submits that he was not given an opportunity to make submissions to Hargrave J as his Honour made his decision on the papers. Mr Shaw points out that the Prothonotary refused to accept Mr Shaw's notices on the basis that they did not comply with r 63.56.1, not on the basis that the proceeding they would commence would amount to an abuse of process. Mr Shaw submits that he was therefore denied the opportunity to make submissions with respect to the abuse of process issue.

25 The answer to that submission is fourfold. First, it was open to Hargrave J to uphold the Prothonotary's decision to refuse to accept a document for filing on grounds different from or additional to the grounds on which the Prothonotary based his decision. Secondly, the Rules do not contemplate a hearing for the purposes of determining whether to make an order under r 27.06(3) directing the Prothonotary to accept a document for filing. Thirdly, Mr Shaw was on notice about the abuse of process issue as it has been raised in the decision of Wood AsJ. Finally, in any event, we consider that had Mr Shaw been specifically given opportunity and invited to make submissions on the abuse of process issue, the outcome could not have been different.[9]

26 For these reasons, we consider that Hargrave J's finding that Mr Shaw's notice constitutes an abuse of process is not affected by sufficient doubt to justify the grant of leave. We would therefore refuse leave to appeal. Insofar as an extension of time is required and sought, we would refuse to give an extension of time.

[1] Shaw v Yarranova Pty Ltd [2011] VSCA 55.

[2] Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd [2006] HCA 55; (2006) 229 CLR 577, [2] (Gummow ACJ), [117] (Kirby and Crennan JJ); Antoun v The Queen [2006] HCA 2; (2006) 224 ALR 51, [2]-[3] (Gleeson CJ).

[3] Altorfer & Stow (A Firm) v Lindsay [2005] WASCA 73, [55]. Cf Giannarelli v Shulkes (Unreported, Supreme Court of Victoria, Nathan J, 25 July 1990).

[4] Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175, [33] (French CJ).

[8] We note that Mr Shaw has not applied to set aside the earlier orders on the basis that they were obtained by fraud.

[9] Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141, 145 (Mason, Wilson, Brennan, Deane and Dawson JJ).

Court (General Civil Procedure) Rules 2005

13 Mr Shaw's grounds amount to an abuse of process because they attempt to re-litigate issues that have already been decided between the parties and/or to raise issues that should have been raised in earlier proceedings.[4] In order to see why that is so, it is necessary to understand the issues that Mr Shaw had raised in previous proceedings, and in particular, in his unsuccessful application for leave to appeal to this Court in Shaw v Yarranova Pty Ltd [2011] VSCA 55 ('Shaw (No 3)').

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