Supreme Court New South Wales Medium Neutral Citation: Riva NSW Pty Limited v Mark A Fraser; Fraser v Riva (NSW) (No. 3) [2020] NSWSC 1472 Hearing dates: On the papers in chambers. Date of orders: 23 October 2020 Decision date: 23 October 2020 Jurisdiction: Equity Before: Slattery J Decision: Directions given Catchwords: CIVIL PROCEDURE - dispute about the directions to prepare for a final hearing of a long-running contest as to costs – despite directions to do so, the parties cannot agree upon a proper set of directions – what directions should be given under Civil Procedure Act 2005, s 61(2)(c) – no question of principle. Legislation Cited: Civil Procedure Act 2005, s 61(2)(c) Cases Cited: Bell Lawyers Pty Ltd v Pentelow (2019) 372 ALR 555 Riva NSW Pty Limited v Mark A Fraser; Fraser v Riva (NSW) (No. 2) [2020] NSWSC 1162 Category: Consequential orders Parties: In proceedings 2017/166645: First Plaintiff: Mark Fraser Second Plaintiff: Christopher Clancy trading as Fraser Clancy Lawyers First Defendant: Riva (NSW) Pty Ltd ACN 113881815 In proceedings 2017/59269: Plaintiff: Riva (NSW) Pty Ltd First Defendant: Mark A. Fraser & Christopher P. Clancy t/as Fraser Clancy Lawyers Representation: In proceedings 2017/166645 Counsel: Plaintiff: P. Barham Defendant: D.K.L Raphael Solicitors: Plaintiff: Christopher Clancy, Clancy Lawyers Pty Ltd Defendant: Michael Coffey, Gells Lawyers In proceedings 2017/59269 Counsel: Plaintiff: D.K.L. Raphael Defendant: P. Barham Solicitors: Plaintiff: Michael Coffey, Gells Lawyers Defendant: Christopher Clancy, Clancy Lawyers Pty Ltd File Number(s): 2017/166645; 2017/00059269 Publication restriction: No Judgment 1. This judgment deals with directions consequent upon the Court's last judgment in these proceedings: Riva NSW Pty Ltd v Mark A Fraser (No. 2) [2020] NSWSC 1162. This judgment should be read with the Court's last judgment. Persons, matters and events are referred to in both judgments the same way. 2. Since the last judgment, the solicitors, Clancy Lawyers Pty Ltd, have written to the Court on 2 September 2020 pursuant to direction 1(a) of the directions made on 31 August 2020, indicating that the defendant does not seek to rely upon the written costs agreements referred to in Orders 5 – 10 made on 11 February 2020. Clancy Lawyers Pty Ltd have also indicated that they do not seek a different costs order to that proposed in Order 4 made on 31 August 2020. 3. And Gells Lawyers have also written to the Court on 7 September 2020 indicating that they do seek a different costs order to that proposed in Order 4 on 31 August 2020: namely, that Messrs Fraser and Clancy pay the costs of Riva between 20 December 2019 and 12 March 2020 as agreed or assessed; and Messrs Fraser and Clancy bear the cost of Riva on the motion dated 13 March 2020. Gells Lawyers also seek a directions hearing to assist in reviewing the remaining issues for determination in accordance with the option given by the Court in the last judgment (at [50]). 4. Following those communications, the Court emailed back to the parties on 8 September 2020 indicating that the Court would attempt to give some directions in writing to attempt to case manage the proceedings, in the following terms: "The Court refers to the letter from Clancy Lawyers dated 2 September 2020 and the letter from Gells Lawyers of 7 September 2020. And the Court refers to paragraph [50] of the Court's judgment of 31 August 2020. The Court has decided to attempt to give some directions in writing to resolve the balance of the issues in these proceedings rather than to hold a formal directions hearing. To that end it is the Court's intent to deal first with the unresolved issue of indemnity costs in the Riva damages proceedings, then to proceed to consider the question of specified gross-sum cost orders. It is the Court's understanding that both parties are prepared for the Court to make a specified gross sum costs order. Would the parties please confirm this. Unfortunately there have been many submissions filed in this case over the last 18 months and the evidence is spread through many affidavits. The Court wishes to substantially reduce the amount of time it is spending in finding the parties' relevant evidence and submissions. So the Court wishes the parties to extract from previous submissions and refashion into a single compact form what they each want to say by way of submission in relation to indemnity costs. The Court is not looking for anything new but rather for the parties to isolate all their submissions on that single subject. Equally, the Court wants the parties to identify in a very compact form the existing evidentiary material upon which they propose to rely for the contest in relation to indemnity costs. The parties must create a joint single lever arch file of the essential material upon which each of them wishes to rely (each party will have half of the file and the Courts judgments do not have to be included in it). The parties must make a considered decision as to how much material they wish to put before the Court on this issue. And the parties should recognise that the Court already has considerable familiarity with the matter. The parties' submissions in relation to indemnity costs must be cross-referenced to the evidence in the single lever arch file bundle. In accordance with the party's obligations under the Civil Procedure Act the Court expects the parties to cooperate and to create a set of agreed set of short minutes of order to give effect to Court's procedural requests set out in this email. This should be done by the end of this week." 1. In response to that email the parties did not provide an agreed set of short minutes. Instead they advanced competing submissions to the Court. 2. Riva next communicated to the Court relevantly as follows: "1. On 8 September 2020 the parties were informed by the Associate to Mr Justice Slattery the parties should cooperate to create an agreed set of short minutes to give effect to the court's requests set out In the email. 2. The solicitors for the parties conferred. Regrettably there is an impasse about the next step to be taken. 3. The email to the parties' solicitors referred to the proposed orders regarding evidence and submissions. For reasons the Court could not have been aware of, the legal representatives for Riva respectfully submit the appropriate next step Is for there to be a hearing on a separate point which Riva contends be referred to as 1'the rejected Chorley Exception." The concept is more fully explained In the observations below. 4. The formal direction sought by Riva Is that by 5pm on Wednesday, 14 October, 2020 Riva file a motion seeking the hearing of the separate point. 5. The basis of the notice of motion is that Riva contends the general law of Australia provides that neither Mr Clancy nor Mr Fraser can claim legal fees in litigation with Riva for work undertaken: a) by them their solicitors Individually or as partners; or b) by employed solicitors or other solicitors of a sole practice or partnership; or c) by any Interposed company of which one or both of them are shareholders." 1. In conclusion, Riva cited the decision of the High Court of Australia in Bell Lawyers Pty Ltd v Pentelow (2019) 372 ALR 555; [2019] HCA 29 ("Bell Lawyers v Pentelow") and related decisions. 2. The solicitors next communicated to the Court relevantly as follows: "We refer to your email of 8 September 2020 setting out the manner in which the parties are to assist His Honour in determining the final cost issues in these proceedings, being the question of indemnity costs and the quantum of the lump sum costs order. We confirm that our clients are prepared for the Court to make a specified gross sum costs order. In compliance with His Honour's directions we prepared draft Short Minutes of Order and a draft Court Book Index and on 9 September 2020 emailed those to the solicitor for Riva. Despite follow-up emails, we are yet to receive any comments from Riva about those proposed orders or the Court Book, including any suggestions for further documents to be included in the Court Book. Instead, Riva has (once again) raised a further issue in relation to our clients' entitlement to costs and is preparing fresh submissions on the issue, contrary to His Honour's clear directions. Riva has had multiple opportunities to be heard on the entitlement issue and from our perspective is merely seeking to prolong these proceedings at significant further cost to our clients. Nevertheless, and regardless of Riva's failure to provide the ordered input, a Court Book has been prepared and, as directed by His Honour, we have extracted submissions and supporting evidence in relation to indemnity costs from our previous submissions and existing evidentiary material and compiled a succinct set of submissions cross-referenced to the evidence upon which we rely. The Court Book will be sent to His Honour by Friday after the submissions have been signed by Christopher Clancy who is not currently in the office." 1. The solicitors then characterised Riva's submission as Riva's "latest attempt to delay his Honour's decision on costs" and said that they would "object when application made by Riva at this late stage". 2. The Court has already commented in its last judgment (at [47] – [49]) that this litigation must be brought to an end. The continuing lack of cooperation between these two parties to achieve that outcome is regrettable. Despite that, the Court will give further directions under Civil Procedure Act, s 61(2)(c) for the following reasons. 3. The Court will not afford the parties any further opportunities for delay. It has decided that it will not entertain any preliminary issues. The parties must prepare for hearing on the basis that everything now remaining to be determined will be decided on the basis of one final set of written submissions on each side, cross-referenced to a single modestly proportioned agreed bundle of documents containing all the evidence relating to all the remaining issues between them. If that means submissions need to be prepared in the alternative, depending upon the outcome of some issues, then that is how the parties must organise themselves. 4. The Court's principal remaining objective is to determine whether indemnity costs are payable in the Riva damages proceedings and the making of a specified gross sum costs order. The subsidiary issues raised are the application of Bell Lawyers v Pentelow to this assessment of costs and the cost issues raised by Gells Lawyers in their letter of 7 September 2020. 5. With these observations in mind as to what the Court expects, the parties should now attend to the Court's request in its email of 8 September 2020 for the provision of agreed directions. That request is now a direction. If the parties cannot agree upon directions, they should provide competing directions. But in crafting these orders the parties should remember that they cannot expand the evidence or the issues in these proceedings without the express authorisation of the Court to that course in advance. If the parties wish to put on any further evidence or take any steps other than preparing the Court book and submissions, then the directions that party propose should encompass that possibility for the Court's consideration. 6. For these reasons the Court will make the following orders: 1. The parties are directed to provide to the Court by 4pm on Thursday 29 October 2020 agreed short minutes of order containing directions to achieve the finalisation of all remaining issues in these proceedings taking account of the Court's observations in this judgment today. 2. If the parties cannot agree upon short minutes of order containing directions by 4pm on Thursday, 29 October 2020, then by 10am on Friday, 30 October 2020 Riva will supply its version of the short minutes of order to the Court and to Fraser Clancy Lawyers and by 4pm on Friday 30 of October 2020 Fraser Clancy Lawyers will provide a marked up copy of Riva's short minutes of order to the Court and to Riva. ********** Amendments 23 October 2020 - [9] typographical amendment, "eyes" to "Honour's" 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: 23 October 2020