Turner v O'Bryan-Turner

Supreme Court of NSW|2019-03-05|Before: Ward CJ, Rees J

Judgment

HER HONOUR: This matter, initially commenced by summons filed on 15 March 2017 and at one stage case managed in the Expedition List in this Division, came before me for the first time for directions in the applications list on 14 February 2019, following an application made by the plaintiffs through my associate for an urgent listing of the matter (following default in compliance by the first to third defendants with various orders that had been made in the proceedings).
At that stage, a hearing date of 29 March 2019 had been fixed for the hearing of an amended notice of motion by the first to third defendants (which had not, as at 14 February 2019, yet been filed notwithstanding orders to do so) for relief, including that the first cross defendant (Nicholas Turner) be restrained from acting as tutor for the first plaintiff in the proceedings (his father, Owen John Turner) and that Angelena May O'Bryan (Ms O'Bryan) be appointed to be the representative of the estate of the late Wendy Joan O'Bryan-Turner (the first defendant in the proceedings) and as tutor for the first plaintiff in the cross-claim that had been filed in his name by the first defendant prior to her death.
What ultimately transpired on 14 February 2019 was that I vacated the listing on 29 March 2019 and made various directions designed to have the amended notice of motion ready for a hearing date at the earliest opportunity and stood the matter over. I reserved the question of costs of that directions hearing and of the costs (if any) thrown away by the vacation of the hearing date listed for the first and third defendants' motion and made directions for the filing of submissions in that regard.
The matter came back before me on 22 February 2019 when I made some orders in relation to the service of a subpoena to be issued on behalf of the plaintiffs but nothing relevantly turns on this. The matter then came before me on 5 March 2019 at which time, by consent, I revoked the appointment of the New South Wales Trustee and Guardian as receiver and manager of the estate of the first plaintiff (on the basis that there are presently no assets in the estate; the NSW Trustee and Guardian did not have the conduct of the proceedings on behalf of the first plaintiff (a state of affairs that is inconsistent with the appointment made in December 2017); and all that was happening was that management fees were being incurred); and made directions for the service of evidence. It was agreed by the relevant parties that the issue of costs occasioned by the non-compliance by the first to third defendant with orders made in October 2018 (for which the plaintiffs pressed) would be dealt with on the papers (i.e., to the submissions on costs that had been served in accordance with the directions made on 14 February 2019).

Background

The background (largely as discerned from the Court file) to this sorry litigious saga may be summarised as follows. (It should be noted that I am here making no findings of fact; simply outlining the circumstances which appear to have led to the present state of affairs.)
The first plaintiff is an elderly man who resides in a nursing home and is an advanced state of dementia. These proceedings were commenced, as already noted, by summons filed on 15 March 2017 in his name by his son from a first marriage, Nicholas John Turner, as his named tutor. The second plaintiff, Allawah Pastoral Pty Ltd (Allawah), is a company associated with the first plaintiff. The third plaintiff is the named tutor, the first plaintiff's son, Nicholas, in his own right.
The first defendant, now deceased, was the second wife of the first plaintiff and at the relevant time(s) held an enduring power of attorney from him. The second and third defendants are the sons of the marriage between the first plaintiff and the first defendant (the third defendant being a minor, at least at the time of commencement of the proceedings). The fourth defendant is the Registrar-General, who has filed a submitting appearance in the proceedings.
There appears to be no dispute that the first plaintiff is incapable of commencing or conducting proceedings, hence the need for a tutor. The present dispute largely relates to the identity of his tutor.
The relief sought in the summons included the making of orders and declarations as to certain transfers of rural properties (the Trundle properties) that had been effected by the first defendant (as the first plaintiff's attorney under the enduring power of attorney) in favour of herself and her sons "in various combinations" (see summons).
The matter was listed before Sackar J in the Expedition List on 7 April 2017, on which occasion his Honour ordered, apparently by consent, that the proceeding be expedited (subject to review, after the first defendant's evidence was obtained on commission). The first defendant's evidence was subsequently taken on commission by a Registrar of the Local Court of New South Wales at Parkes, having regard to the first defendant's then medical condition.
The plaintiffs subsequently filed in Court a statement of claim, pleading their claims for relief under a variety of statutes; for breach of fiduciary, equitable and common law duties; fraud on the power; unconscionable conduct as an attorney under an enduring power if attorney; and for "knowing assistance and participation and receipt of property" (i.e., claims under both limbs of Barnes v Addy (1874) LR 9 Ch App 244) (see the statement of claim). Sackar J also on that occasion granted interlocutory injunctive relief, including restraining dealings with the Trundle properties until further order.
Subsequent directions were made in the Expedition List in relation to the matter and, on 31 May 2017, a defence was filed for the first to third defendants. At the same time, a cross-claim was filed in the name of the first plaintiff, as cross-claimant, by the first defendant as his named tutor. The cross-claim is brought against both the first plaintiff's son, Nicholas, and Allawah. In it declaratory and other relief is sought, including relief as to certain promissory notes to which reference had been made in the statement of claim. (There thus appears to be some overlap or potential overlap between the respective claims.) The same solicitors who were acting on the record for the first to third defendants in their defence of the plaintiffs' claims in the statement of claim (the principal claims) were named as the solicitors on the record in the cross-claim filed in the name of the first plaintiff (as cross-claimant) by the first defendant (as his named tutor).
Pausing here, it must surely have been apparent to the legal representatives for the first to third defendants at that very early stage of the proceedings that this chain of events gave rise to the difficulty that the first plaintiff was now, in effect, on both sides of the litigious record: as plaintiff, represented by his son Nicholas and lawyers engaged by Nicholas, making claims against the first defendant (and her sons); and as cross-claimant, represented by the first defendant and lawyers engaged by the first defendant in her defence of the principal claims, making claims against Nicholas and the second plaintiff. I will say more about this below. At this stage, suffice it to say that, at the very least, one would have thought that this scenario might give rise to (and the legal representatives for the first defendant should have recognised) a potential conflict on the part of the lawyers purporting to act both for the first plaintiff on the cross-claim against his son and against the first plaintiff on the principal claims, particularly where the named tutor for the cross-claimant is the first defendant (against whom the first plaintiff was bringing the principal claim).
The matter then came before Sackar J on 23 June 2017, on which occasion, after making various directions as to the matter, his Honour relisted the matter for appointment of a hearing date on 18 August 2017. On that occasion, it appears that the first to third defendants foreshadowed an application to file and serve a motion seeking the appointment of an independent person as the "plaintiff/cross-claimant's" tutor and to restrain the solicitors on the record for the plaintiffs from further acting for the first plaintiff/cross-claimant. His Honour gave leave for such a motion to be filed no later than 5pm on 9 September 2017 and made the motion for the appointment of an independent person as the plaintiff/cross-claimant's tutor (i.e., the application in relation to only one part of the relief foreshadowed on 18 August 2017, the other being the replacement of Nicholas as the first plaintiff's tutor on the principal claim) returnable for directions on 15 September 2017. The first to third defendants then filed their notice of motion on 8 September 2017.
On 15 September 2017, the matter was adjourned to 3 November 2017 on the basis that the parties intended to participate in a mediation before that date. Presumably, any such attempt at mediation was unsuccessful because, on 3 November 2017, orders were made by Sackar J in chambers (by consent) regarding the filing of evidence in relation to the motion to restrain the solicitors acting from the first plaintiff from continuing to act in the proceedings and the matter was relisted before Sackar J on 1 December 2017 for the allocation of a hearing date for the motion. On that date, the matter was adjourned to 13 December 2017.
On 13 December 2017, his Honour made orders relevantly including the appointment of the NSW Trustee & Guardian as receiver and manager of the first plaintiff's estate on an interim basis. No step appears to have been taken since then for the NSW Trustee & Guardian to assume conduct of the proceedings (either the principal claim or the cross-claim); certainly no notice of change of solicitor was filed, which might have indicated the assumption of the conduct of the litigation by the NSW Trustee & Guardian in its capacity as receiver and manager of the first plaintiff's estate.
After further directions hearings, the 8 September 2017 notice of motion was listed for hearing before Sackar J on 26 June 2018. On that occasion (and the following day, 27 June 2018) his Honour heard the application, following which orders were made for additional submissions to be filed. (As indicated earlier, all that was heard at that stage was the application to restrain the first plaintiff's solicitors from further acting for him in the proceedings.) On 25 July 2018 his Honour published reasons (Turner v O'Bryan Turner [2018] NSWSC 1140) for his conclusion that it was not necessary to restrain the lawyers acting for the first plaintiff from continuing to act in the proceedings.
On 20 July 2018, a notice of motion was filed by the first defendant as "cross-claimant" (although at that stage the first defendant was merely the named tutor for the cross-claimant), seeking, relevantly, that leave be granted to the cross claimant to file an amended statement of cross claim. (In that amended statement of cross-claim the defendants are named as cross-claimants in addition to the first plaintiff.)
It appears that what then occurred was that the matter was referred to the Applications List judge (then Parker J), presumably for directions as to the then (and still) extant application for the appointment of a new tutor for the first plaintiff on the principal claims (and consequential orders). On both 14 and 28 August 2018, the matter came before his Honour and was adjourned on each occasion.
On 28 August 2018, the first defendant died.
On 11 September 2018, Ms O'Bryan (the first defendant's sister) signed a consent to act as tutor on behalf of the cross-claimant (i.e., the first plaintiff in his capacity as cross-claimant on the cross-claim); and a consent to act as representative of the estate of the first defendant. However, the first defendant's solicitors apparently considered there was a need for "confirmed instructions" from Ms O'Bryan before moving to progress the hearing of the application for removal of the first plaintiff's tutor (see further below at [37]) (see pp 5-7 of exhibit DLP-1 to the affidavit sworn 26 February 2019 of Daniel Lee Patartore).
The matter then came before Rees J (then the Applications List judge) on 9 October 2018. On that occasion, her Honour made orders in terms of Short Minutes of Order prepared by the first to third defendants (these including the very orders the subject of complaint by the plaintiffs on the present application as to non-compliance therewith by the first to third defendants). Relevantly, her Honour ordered (presumably by consent of the parties) the first to third defendants to file and serve an amended notice of motion by 16 October 2018 as to the following matters: 1. in the plaintiffs' claim, the appointment of a representative of the estate of the first defendant (pursuant to the Uniform Civil Procedure Rules 2005 (NSW), r 7.10 (UCPR)) (although misnumbered in the Short Minutes of Order, this is clearly what was intended); 2. in the cross claim, the appointment of a person to act as tutor for the cross claimant (Owen John Turner); and 3. in the cross claim, leave to amend the statement of cross claim.
Her Honour also ordered: the applicants in the amended motion to file and serve any further evidence on which they rely in support of the motion by 16 November 2018; the respondents to the amended motion to file and serve any evidence on which they rely in answer to the amended motion by 16 December 2018; the parties to file and serve written submissions 14 days prior to the date fixed for hearing; and listed the (then obviously yet to be filed) amended motion for hearing on 29 March 2019, making the usual order for hearing. There does not appear to have been any suggestion that compliance with these orders and directions was dependent upon a grant of probate in respect of the first defendant's estate.
That was, relevantly, the state of affairs when the matter came to my attention (by an email communication to my associate on 13 February 2019 on behalf of the plaintiffs seeking an urgent listing of the matter in light of the then forthcoming hearing date for the amended notice of motion). I caused the matter to be listed on 14 February 2019, on which occasion I was informed that the first to third defendants had not yet filed any amended notice of motion (whether one in accordance with Rees J's orders as summarised at [23] above, or otherwise); nor had they filed any evidence in support thereof. This, it should be noted, was some four months after the relevant orders and directions had been made by Rees J and only six weeks before the amended notice of motion was due to be heard.
After discussion with Counsel as to the matter, including as to the potential difficulty (acknowledged by Counsel for the first defendant) arising from the fact that the plaintiff (Owen Turner) appeared on both sides of the record (see T 14/02/19; 7.17ff), I accepted that the matter would not be able to be heard on 29 March 2019 and vacated that listing, making directions as to the ongoing progress of the matter (including that the first to third defendants file and serve by 21 February 2019 an amended notice of motion "of the kind the subject of order 1 made by Rees J on 9 October 2018"). I informed Counsel appearing for the first to third defendants that I was allowing that extended time so that consideration could be given by her and by those instructing her as to the appropriateness of seeking to have the same person representing both the first plaintiff on his claim against the estate of the first defendant and on a cross‑claim by the first plaintiff against his named tutor in the principal claim (see T 14/2/19; 10.31ff).
On 21 February 2019, an amended notice of motion was filed by the solicitors on the record for the defendants. On the coversheet, it identifies the parties for whom it is filed as the first and third defendants (not including the second defendant; and not purporting to be filed by the first plaintiff as cross-claimant). Attached to that coversheet, is another document, headed amended notice of motion, naming the cross-claimant (and the person seeking the orders) as the cross-claimant "Wendy Joan O'Bryan-Turner".
The original cross-claim names the cross-claimant (as adverted to above) as Owen John Turner by his tutor Wendy Joan O'Bryan-Turner. The proposed amended cross claim (attached to the affidavit sworn 21 February 2019 of the solicitor on the record for "the defendants and the cross claimant in these proceedings", Mr Paul Hargreaves), for which leave has not yet been granted, names Owen John Turner by his tutor Wendy Joan O'Bryan-Turner as the first cross-claimant; Wendy Joan O'Bryan-Turner by her representative Angelena May O'Bryan as the second cross-claimant; and the second and third defendants as the third and fourth cross-claimants.
There is, therefore, a measure of confusion (at least on the part of whoever prepared the amended notice of motion) as to the party moving that application (i.e., whether it is the first plaintiff or the first defendant, in her capacity as putative cross-claimant).
The plaintiffs note that the amended notice of motion filed 21 February 2019 does not comply with the orders I made on 14 February 2019 (nor the orders made by Rees J on 9 October 2018) in that the amended notice of motion includes, as part of the orders sought, orders which are outside the scope for which leave was granted by Rees J. It is said that the additional relief sought (see, for example, the prayers for relief at [2A-6] of the amended notice of motion) is "more than "de minimis", trivial, corrective or administrative and seek[s] to enlarge the scope of the motion by dealing with property of the first defendant" (see the plaintiffs' written submissions filed 26 February 2019 at [18]). It is submitted that this has a tendency to impair the facilitation of a "just, quick and cheap resolution of the real issues".

Plaintiff's submissions on costs

The plaintiffs submit that the first to third defendants (and/or cross claimant - by whom, I understand the plaintiffs to be referring to the deceased, Wendy O'Bryan-Turner though this is not clear) made no reasonable attempt to comply with the orders made by Rees J on 9 October 2018 and it is said that they "knowingly, intentionally and/or wilfully" disregarded compliance with the orders without a proper basis. It is said that this conduct was "plainly unreasonable and amounts to delinquency".
The plaintiffs point to correspondence between the respective solicitors in the period from 19 October 2018 and 31 January 2019 in which the plaintiffs' solicitors requested compliance with the orders (i.e., the filing of an amended notice of motion and evidence in support thereof) and the response thereto from the defendants' solicitors.
The plaintiffs argue that the first to third defendants (and/or cross claimant) knew that: they had not filed and sealed an amended notice of motion; they had not filed and served further evidence in support of the amended motion; they had not complied with Rees J's orders; the non-compliance would be ongoing; they would not comply with the orders; because of their position, the plaintiffs and/or cross defendants could not comply with the orders; the plaintiffs and/or cross defendants had requested, on numerous occasions, that they comply with the orders; their position was that they did not want the motion to be heard until a grant of probate; there was a hearing scheduled for the amended motion on 29 March 2019; their actions were prejudicing the hearing; and that their actions would prejudice the Court's ability to reallocate the hearing date for other litigant to enable the scarce resources of the Court to be utilised, but that, despite this, the first to third defendants chose not to relist the matter "and bring their non-compliance to the attention of Court".
It is submitted that the first to third defendants' (and/or cross claimants') actions were in conflict with the overriding purpose, objects of case management and dictates of justice as provided in ss 56-58 of the Civil Procedure Act 2005 (NSW). The plaintiffs submit that, had they not sought to relist the matter urgently, significant delays would have resulted, noting that, as it stands, the scheduled hearing date of 29 March 2019 has now been vacated (see plaintiffs' written submissions at [20]).
The plaintiffs say that they have incurred unnecessary costs as to: correspondence due to the non-compliance; attendance at the hearing on 14 February 2019; preparation of these submissions and supporting affidavit; and attendance at the hearing on 5 March 2019. It is submitted that, in the circumstances, those related costs should be paid by the first to third defendants on the indemnity basis.

First to third defendants' submissions on costs

The first to third defendants argue that costs were "thrown away" when the plaintiffs re-listed the proceedings on an urgent basis before me on 14 February 2019. (That submission, in my opinion, disregards that it is incumbent on litigants in this Court - and for legal practitioners, having regard to their professional obligations as officers of the Court - to conduct litigation in accordance with the overriding statutory mandate provided in the Civil Procedure Act for the just, quick and cheap resolution of the real issues in dispute. That includes taking reasonable steps promptly to make the Court aware of likely disruptions or delays to hearing dates and making application for a varied procedural timetable if compliance with an existing timetable becomes "not possible", as the first to third defendants here contend, for any reason; rather than simply ignoring court orders and directions then in place.)
It is submitted that, since the relief sought in the amended notice of motion (that Rees J had directed be filed) would have resulted in the joinder of Ms O'Bryan as a new representative party who would then be at personal risk as to costs, it was "appropriate and necessary" that her "confirmed instructions" be given before filing the amended notice of motion by which she would be joined, and that those "confirmed instructions" were not given until about 19 February 2019 (see first to third defendants' written submissions filed 28 February 2019 at [3]). (The need for "confirmed instructions" may well have been the case but, if so, it must have been a matter apparent as at the time the orders were made in October 2018.)
The first to third defendants say that their non-compliance with Rees J's orders was not the result of any disrespect for the Court but, rather, that strict adherence to the directions was "not possible". (As noted, that does not excuse the failure of the first to third defendants to seek a variation of the orders when it became apparent that the orders could not, or perhaps more precisely, would not be met.)
It is submitted that the plaintiffs were aware at all times that the documents would be filed as soon as Ms O'Bryan's instructions were confirmed; and that it was unnecessary for the plaintiffs "to claim urgency", and re-list the proceedings, as they did on 14 February 2019. It is further submitted (see at [5]) that the plaintiffs were not prejudiced by short notice of the amendments, in circumstances where the motion was not listed for hearing until 29 March 2019. (That submission ignores not only the inconvenience to the Court and to other litigants of hearing dates being vacated not long before a hearing but also the cost to the plaintiffs of seeking compliance with the court orders that were in place for the timely preparation of the matter to hearing and the potential cost of such preparation in the by then relatively short time before the hearing date.)
The first to third defendants say that, while awaiting Ms O'Bryan's confirmed instructions, the Court of Appeal gave judgment in a similar matter on 18 December 2018 (referring to McFee v Reilly [2018] NSWCA 322) which gave rise to a further necessary amendment to the proposed motion, seeking the joinder of a solicitor as a cross-defendant and that the deterioration of seasonal and economic conditions on the Trundle properties (which are said to be central to the substantive proceedings) in the intervening period, due to a severe drought, "required" a further application to be added (seeking relief from the interlocutory injunction granted by consent on 11 April 2017). (That may be so, but again it highlights the need for the first to third defendants to have approached the court for a variation of the orders in a timely fashion.)
The first defendant submits that the parties' costs of 14 February 2019 should be costs in the Amended Motion. (The first to third defendants also apologise for the late filing of their costs submissions; yet another, though less egregious, non-compliance with directions, and one on which nothing here turns.)

Determination

Rule 42.10 of the UCPR provides that: [i]f a party fails to comply with a requirement of these rules, or of any judgment or order of the court, the court may order the party to pay such of the other parties' costs as are occasioned by the failure.
There is no doubt that the first to third defendants failed to comply with the orders made by Rees J, by failing to file and serve an amended notice of motion by 16 October 2018 and failing to file and serve any further evidence in support of the motion, as directed by her Honour. It also appears clear that they, or at least their solicitors, did so knowingly (their solicitors having formed the view that a grant of probate was required in order to obtain "proper instructions" in relation to the estate - see their letter dated 24 January 2019; but seemingly not having raised this when the orders were prepared by them and provided to Rees J in October 2018).
If, as the first to third defendants somewhat emphatically submit, "strict adherence" (which in the circumstances is hardly an apt description given that there was no compliance at all) with the orders and directions made by Rees J was not possible due to the need to await "confirmed instructions" or "proper instructions"; or a grant of probate; or once intervening events necessitated the seeking of relief not contemplated when the orders granting leave to file the amended notice of motion were made (all of which here being put forward as the excuses for non-compliance), then it was incumbent on the first to third defendants to re-list the matter and to seek amendment to the orders and directions that had been sought by them and made by Rees J back in October 2018.
Apart from anything else, a failure promptly to notify the court of matters that may alter or have an impact on listed hearing dates has an impact on the availability of the court to deal with other matters (where other litigants may be progressing their matters with due diligence and for whom those hearing dates might have been utilised).
In my opinion, the attitude demonstrated by the first to third defendants through their legal representatives in this regard (as evidenced by the correspondence annexed to Mr Paratore's affidavit) can fairly be described as cavalier. It is appropriate in my opinion to mark the Court's disapproval of conduct of the kind here evidenced by making an indemnity costs order against the first to third defendants in respect of the costs occasioned by their non-compliance under the orders of Rees J; those being the costs referred to at [35] above.
Finally, I again note that there has seemingly been no attempt to grapple with what Counsel for the first defendants described as "a certain logistical difficulty" arising out of the proposition that Ms O'Bryan should be appointed both as representative of the estate of the first defendant and as the tutor for the first plaintiff on the principal claim and that the same set of solicitors as those who act for the first defendant's estate in defending the claim made against or by the first plaintiff should also act for the first plaintiff's tutor in a claim against the first defendant's estate (see the discussion at T 05/03/19; 4.44). I refer in this regard to r 11 of the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (NSW) (see the commentary in G E Dal Pont, at [7025.5]; and see Alexander (trading as Minter Ellison) v Perpetual Trustees WA Ltd [2001] NSWCA 240; Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222; UTi (Aust) Pty Ltd v The Partners of Piper Alderman [2008] NSWSC 219; Breen v Williams (1996) 186 CLR 71; [1996] HCA 57).
To date, there is nothing to suggest that any real attention has been drawn to this potential problem (surprisingly, since the first to third defendants seem to have been quick to challenge the retainer of the first plaintiff's solicitors to act on the principal claims). That said, it is not a matter that has led me to make the costs orders indicated above. I simply note it in the (perhaps forlorn) hope that it will be addressed sooner rather than later so as to avoid further unnecessary costs being incurred.

Orders

For the above reasons, I make the following order: 1. Pursuant to rule 42.10 of the Uniform Civil Procedure Rules 2005 (NSW) order the first to third defendants to pay the plaintiffs' costs occasioned by their failure to comply with the orders and directions made by Rees J on 9 October 2018 in relation to the filing of their amended notice of motion and evidence in support, being the plaintiffs' costs unnecessarily incurred in pressing for compliance with those orders and directions; attendance at the directions hearings on 14 February 2019 and 5 March 2019; and preparation of written submissions as to costs and supporting affidavit; and attendance on 5 March 2019, those costs to be paid on an indemnity basis.

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: 13 March 2019

Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015(NSW)

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