Supreme Court New South Wales Medium Neutral Citation: Preston v Nikolaidis [2022] NSWSC 521 Hearing dates: 9 April 2021, 6 May 2021, 18 June 2021 & 28 July 2021, and written submissions up to 20 September 2021. Date of orders: 2 May 2022 Decision date: 02 May 2022 Jurisdiction: Equity Before: Slattery J Decision: Plaintiff has not elected to have abandoned his claim for the files. Directions made requiring the plaintiff to put on evidence as to what value the files have to him, so that the Court can better case manage the balance of these proceedings. Proceedings not stayed on the plaintiff's motion. Catchwords: CIVIL PROCEDURE – Election – defendants contended plaintiff has elected to have abandoned a cause of action through statements made on behalf of the plaintiff to the court – whether the cause of action was abandoned or not – stay of proceedings – plaintiff seeks proceedings be stayed pending resolution of referral of issues to the NSW Police and the NSW Judicial Commission – whether proceedings should be stayed. Legislation Cited: Civil Procedure Act 2005 Uniform Civil Procedure Rule Judicial Officers Act 1986 Limitation Act 1969 Cases Cited: Preston v Nikolaidis [2017] NSWSC 1527 Preston v Nikolaidis [2021] NSWSC 36 Category: Consequential orders Parties: In the 1993/00023395 proceedings: First plaintiff: John Preston Second plaintiff: Western Suburbs Constructions Pty Limited (formerly Preston Erections Pty Ltd) First defendant: Doreen Philomene Nikolaidis (as the executrix of the estate of the late Mithofanis Demetrius) Second defendant: Leon Niloaidis t/as M D Nikolaidis & Co Third defendant: Michael Zwar In the 2015/00331795 proceedings: Plaintiff: John Preston First defendant: Leon Nikolaidis Second defendant: Michael Zwar Representation: In the 1993/00023395 proceedings: Counsel: First and second plaintiffs: First, second and third defendants: T. Hale SC Solicitors: First and second plaintiffs: In person First, second and third defendants: Michael Zwar, Diamond Conway Lawyers In the 2015/00331795 proceedings: Counsel: First and second plaintiffs: First and second defendants: T. Hale SC Solicitors: First and second plaintiffs: In person First and second defendants: Michael Zwar, Diamond Conway Lawyers File Number(s): 1993/23395; 2015/331795 Publication restriction: Nil Judgment 1. These proceedings brought by the former client of a firm of solicitors have had a lengthy history before the Court. Many judges have dealt with them since they were commenced in 1993. An overview of their unfortunate history is given in the Court's two most recent judgments in the proceedings, the first of which I gave in 2017 and the second, which Williams J gave in 2021: Preston v Nikolaidis [2017] NSWSC 1527 and Preston v Nikolaidis [2021] NSWSC 36. 2. For the convenience of the reader this judgment should be read with the Court's two most recent judgments. Without further introduction, events, matters, and persons are referred to in this judgment in the same way as they are in my 2017 judgment. 3. The present judgment clears away some procedural issues, so the parties can attempt to focus upon the remaining issues dividing them. The plaintiff, Mr Preston now appears for himself in these proceedings. Mr Hale SC appears for the defendant solicitors, the Firm. The Files Return Election Issue 1. On 6 May 2021 the Court listed for hearing the question of whether Mr Preston was precluded by certain statements made in Court in May 2018 from seeking the return from the Firm of the files the subject of the cost assessment conducted under the 1993 proceedings. The Court did not make an order for the separate hearing of this issue under Uniform Civil Procedure Rule ("UCPR"), r 28.2. Neither party indicated a likelihood of appealing against any adverse decision in relation to the issue. 2. But it was nevertheless useful for the parties in preparing their respective cases for them to have the advantage of the Court's determination of this issue before other issues were argued. So, the Court provided an opportunity for short oral argument to take place on the issue, which gained the abbreviated description in the Court's orders at the time of "the files return election issue". The determination of this issue was foreshadowed in orders the Court made on 6 May 2021 as follows: "[1] The Court notes that it is convenient for the further conduct of the combined proceedings for the Court to first consider the procedural issue of whether it is presently open to the plaintiff, Mr John Preston, to seek the return from the defendants of the solicitors' files the subject of the cost assessment conducted under the 1993 proceedings ("the files") or whether by reason of statements made to the Court on 14 May 2018, or by reason of any other matter, the plaintiff is now precluded from seeking the return of those solicitors' files ("the files return election issue")." 1. Orders were also made on 6 May for the exchange of affidavit evidence and submissions on the files return election issue and argument upon it first took place on 11 June 2021. But disputes continued between the parties about what evidence was before the Court in relation to the issue and the matter returned to Court for further directions on 28 July 2021. After that date Mr Preston continued to provide further submissions to the Court. These submissions tended to expand the issues beyond the Court's originally contemplated contest in relation to the files return election issue. The Court finally directed on 20 September 2021 that no further submissions on either side should be filed before the court gave judgment on the issue. 2. As a result of reviewing the materials provided by the parties it appears that the files return election issue should most usefully be determined by reference to what was said in Court on 14 May 2018. On the submissions provided it is too difficult for the Court to determine whether it can fairly decide whether "by reason of any other matter" Mr Preston is precluded from seeking a return of the files. Therefore, any other reasons precluding the return of the files may have to await later argument. The Court can determine whether statements made in Court on 14 May 2018 preclude him from seeking their return. That is the principal issue with which these reasons deal. 3. Mr Hale SC on behalf of the Firm identifies certain statements made by Mr Zipser of Counsel to the Court on 14 May 2018. Mr Hale SC then contends that the statements resulted in an "irrevocable election" on the part of Mr Preston not to seek the return of the files from the Firm. Mr Preston acknowledges the statements that were made to the Court, but he denies that the statements in question constitute an irrevocable election not to pursue the files. 4. In the result, the Court has concluded that the identified statements made to the Court on behalf of Mr Preston do not objectively involve any irrevocable election on his part not to seek the return of the files. As a result of this outcome, it has not therefore been necessary for the Court to consider whether even if Mr Preston had been asked to formally elect not to pursue this issue whether, by reason of the provisions of the Civil Procedure Act 2005 ('CPA') and the UCPR he would not have been irrevocably bound by the election any event. 5. The starting point is the statements made to the Court on 14 May 2018 that are relied upon by Mr Hale SC. These statements are sufficiently identified in the Court's analysis below. On 14 May 2018 Mr B Zipser of counsel appeared for Mr Preston and Mr Svelha of counsel appeared for the Firm. The context was that the Court was attempting to isolate the specific costs orders which could be made the subject of a specific gross sum costs order under CPA, s 98(4)(c). The Court was endeavouring to undertake a mapping exercise of the early part of the 1993 proceedings to work out what costs orders existed, what they covered, whether any party wanted further costs orders to be made, and what lump sum costs orders could then be made. 6. Prior to this exercise commencing, the Preston parties had indicated in written communications to the Firm on 6 February 2018 that they may no longer be seeking the return of the files. At a directions hearing on 8 December 2017 Mr Preston had expressed interest in the return of his original files and the Firm opposed that course. On 6 February 2018 Mr Preston's solicitors stated by email to the solicitors for the Firm, "On reflection over the summer vacation, the plaintiff no longer seeks an order for the return of his files. The original files probably no longer have commercial value to the plaintiff and in any event the defendant provided the plaintiff with a copy of some of the files in 2011. In the circumstances the plaintiff withdraws his request or application for an order for return of the files. 1. On 14 May 2018 the Court endeavoured to explore with Mr Zipser whether this was indeed the case. The Court indicated to Mr Zipser that it anticipated that the remaining issue for the parties was really the outstanding costs and any lien associated with them that it was difficult to imagine what value any files, which were still held by the Firm, and which were by then over 25 years old, could possibly have to the client, Mr Preston. The Court wanted to know whether the issue of the return of the files was still outstanding. If the issue was no longer being agitated than the Firm could, for example, dispose of the files if it chose to do so. 2. Close analysis of what was said on 14 May 2018, reveals that Mr Zipser was not making an irrevocable election at that time on behalf of Mr Preston. Mr Zipser indicated that his analysis of the legal position was as set out in the email to the Court of 6 February 2018: that under the Limitation Act 1969 a solicitor's lien may continue over the files, even though the underlying debt for which they stood as security may be extinguished by the operation of the Limitation Act. The following exchanges then took place on the issue between the Court and Mr Zipser. In places in these exchanges emphasis has been added in italics for the purposes of this judgment: "Mr Zipser: The lien continues even though the debt is extinguished. The Court: All right. Well, so that you have said you don't want the files because you don't want to get into a battle about liens, basically? Mr Zipser: That's correct, and thus the written communication of 6 February continues. The Court: But that is irrevocable, that is the position which has to be resolved. You can't change your mind about that, I would think, once the Court asks you. I have to quell this dispute, although you might not have thought that was irrevocable at the time you sent it and it probably isn't, you can change your mind now, why shouldn't I make in effect an order that permits them to do what they like with the files? Mr Zipser: I understand your Honour's question. The Court: You can't be allowed to change your mind about this. It seems to me that you will have to, as a condition of the proceeding with the rest of this and accepting judicial time, investing judicial time in progressing the rest of the case, I will make it a condition of that, not immediately but at some stage pretty soon that you will have to declare that that position is irrevocable. Mr Zipser: I understand your Honour's point which I think is a fair point. The Court: And you will be estopped because I will only make orders on the condition that you accept that. Mr Zipser: I understand. I will – The Court: Because they need to know where they stand. They want to chuck the files in the dumpster." 1. The material in the transcript in italics shows that the Court was interested in requiring Mr Preston to take an irrevocable position on this issue, so that the Court could move on to the balance of the proceedings without having to revisit the issue. But the Court was clearly deferring the occasion when it would require Mr Preston to take an irrevocable position on the matter. The transcript says that it was "not immediately" but was going to be "at some stage pretty soon" that the issue of irrevocability would have to be considered. There is no support in this material for the conclusion that Mr Preston had taken some kind of "irrevocable election" not to pursue this issue. 2. And when the Court says in this passage "you will be estopped", the context is that when the Court addressed this issue in a formal way it contemplated that a binding estoppel would then arise against Mr Preston seeking to raise the point again. 3. The Court then returned to the issue and made it even clearer that a final procedural election was not being sought that day. "Mr Zipser: Your Honour makes the fair point that I will pass on to my client that he needs to give instructions that… The Court: He is not bound to do it now, but the position taken, if I may say so, on your side is a very sensible one but it is only going to help the progress of this litigation if it is a definite waypoint that we get past and I am not going to go back to it. It has got to be made a decision and the way it is a condition of making orders to make the matter go forward, you will be required, unless you resist and give notice to the contrary, you will be required to make that notification irrevocable." Mr Zipser: Thank you your honour. The Court: You can argue that you shouldn't have to do that, and that will be fine, but you are now being put on notice of that…" 1. The Court then addressed Mr Svelha about the issue: The Court: … and what I have just said on that subject, Mr Svelha, it is really up to you to remind me at a future directions hearing that that is what I said because the ball is in your court now. Mr Svelha: I understand that your Honour. The Court: If you want to make that irrevocable, you just propose inter partes prior to the next directions hearing that the judge make that order as a condition of other orders. [A]s of today Mr Zipser's side, Mr Preston, are aware that that is what is in my mind and that is what I am likely to do, so that you can put them in the skip." 1. The exchanges between the Bench and Bar table then moved on to other issues. The material highlighted in italics shows that the scheme the Court had in mind was at a future directions hearing after 14 May 2018 and after prior notice by the Firm to make formal orders entrenching a decision by Mr Preston to elect not to seek the return of the files. This would be achieved by a specific procedural mechanism making Mr Preston's abandonment of the claim for the return of the files a condition of other orders of which he would take the benefit. The purpose of such a mechanism was to make it more difficult for Mr Preston to use provisions of the CPA and the UCPR to resile from the position that he would have by then taken to abandon his claim for the files. 2. The procedural mechanism foreshadowed by the Court was not formalised at any time after 14 May 2018. Therefore, the way the statements of the Court that were made on 14 May 2018 should be interpreted is as foreshadowing orders which were never ultimately made. No election by Mr Preston took place on that day. 3. The Court's conclusion on the files return election issue therefore is that it is open to the plaintiff, Mr Preston, to seek the return from the defendants of the solicitors' files the subject of the cost assessment conducted under the 1993 proceedings and that nothing said in Court on behalf Mr Preston on 14 May 2018 precludes him from continuing to seek the return of these files. 4. The Firm filed a motion dated 4 June 2021 seeking orders that if Mr Preston was allowed to "resile from his election" and if the Court were to order the delivery up of the files, then as a condition of doing so Mr Preston should be required to pay into Court the amount of $95,749.40, or an amount of $250,000 as security for the defendant's costs. The Court has not yet dealt with that motion, because the Court has not yet required delivery up of the files. Other Matters and Conclusion 1. Two other issues have recently agitated the parties which can also be briefly dealt with in these reasons. 2. First, Mr Preston believed that a stay had been placed upon my 2017 judgment preventing an appeal from it. He indicated to the Court that he wanted any such stay to be lifted, so any appeal by the Firm against it could proceed. Mr Preston indicated that he would seek a resolution of any such appeal before the Court moved on to conclude the rest of the proceedings. 3. But it appears that Mr Preston was under a misunderstanding about such a stay being put in place. The imposition of a stay on appeal would be a most unusual step in proceedings. If there were a right of appeal arising from a judgment at first instance in the Court, a stay on conducting an appeal would normally only be granted by the Court of Appeal for procedural reasons such as non-compliance with the Court of Appeal's procedural directions or failure to provide security for costs pending appeal. 4. But no appeal has ever been brought by the Firm from my 2017 judgment. And no stay has ever been imposed on such an appeal. Mr Preston says that he gained this understanding from his former counsel, Mr Zipser. But it is highly unlikely that Mr Zipser would have told Mr Preston that there was an appeal which was stayed when in fact there was no appeal and no stay. A better explanation to Mr Preston's incorrect understanding is that my 2017 judgment did not involve the determination of a separate question ordered by the Court under UCPR r 28.2. The judgment did lead to the making of a declaration that the Firm's entitlement to costs the subject of the relevant bills of costs was extinguished and therefore the Firm was unsuccessful. But the Firm has no right of appeal from the judgment without leave before the conclusion of the proceedings. This legal situation may perhaps have been explained to or interpreted by Mr Preston as a form of stay. 5. Second, Mr Preston also applied by motion dated 1 April 2021 for a stay of these proceedings until various complaints he had made about the Firm had been dealt with by the New South Wales Police and complaints against various judicial officers in the conduct of these proceedings had been dealt with by the New South Wales Judicial Commission. His material in support of this application makes general allegations against several persons in relation to these proceedings. It is not necessary to identify those allegations or the persons that are the object of them in these reasons. 6. Nothing in the legislation constituting the Judicial Commission, the Judicial Officers Act 1986 or the circumstances of this case indicate that a stay should be granted in these proceedings merely because complaints of this kind have been made. Generally, complaints to or dealings by a party to litigation with government authorities do not alter the conduct of judicial proceedings or impair access by that party to the courts. This case will continue. 7. It is now appropriate for the proceedings therefore to be relisted to isolate and prepare the remaining issues for hearing. Mr Preston says that he now wants the files back and the Court will have to deal with that issue. But to better manage this issue the Court needs to understand whether the files have any continuing value or significance to Mr Preston, as what is known about them tends to indicate that they concerned a debt recovery and other like minor commercial litigation, which has long since become statute barred. There are a number of general statements about why he wants the material in the files, but these are not specific enough for the Court to what the real issues in dispute between the parties are. So, the Court will require Mr Preston to file an affidavit specifying to the best of his knowledge and recollection the present financial or other value to him of the contents of the files and the use or uses to which he proposes to put the contents of the files, if and when he recovers them. 8. The Court makes the following orders and directions: 1. The plaintiff's motion dated 1 April 2021 is dismissed with costs; 2. The proceedings are listed for further directions at 9:30 am on 8 June 2022 or at such other time that is mutually convenient to the parties as is arranged with the chambers of Slattery J; and 3. By 4 pm on 6 June 2022 the plaintiff is directed to file an affidavit specifying to the best of his knowledge and recollection the present financial or other value to him of the contents of the files and the use or uses to which he proposes to put the contents of the files, if and when he recovers them. ********** 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: 02 May 2022