COSHOTT v DOWNS and ANOR SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, MEAGHER and SHELLER JJA 1 June 1994, 1 June 1994 [1994] NSWCA 64 ORDER THAT PLAINTIFF'S SOLICITOR PAY DEFENDANT'S COSTS PERSONALLY — solicitor not heard before order made — summons seeking that order be quashed — solicitor's client not a party — solicitor's client has real interest — court should not determine proceedings as presently constituted — no adjournment due to delay and neglect of client's interest — costs of present proceedings to be paid by claimant — no intention to decide any matter of substance. In August 1988 Downs DCJ ordered the plaintiffs solicitor personally to pay the costs of the defendant of discontinued proceedings. The order was on the basis of what the judge perceived as shortcomings in the preparation of the plaintiff's case which had made it necessary for the plaintiff's counsel to seek the order for discontinuance of the proceedings. The solicitor took the view that the order against him would be set aside upon application to the Supreme Court because he had not been given an opportunity to be heard before the order was made against him. By summons, to which the client was not made a party, the solicitor asked that the order be quashed. One consequence of the course taken by the solicitor was that when his client's discontinued proceedings were recommenced they were stayed pending compliance by the solicitor with the order for costs, and those proceedings remain stayed in 1994. HELD: (1) the client had a real interest in these proceedings since inter alia, one possible result would be that, eventually, she might be ordered to pay the costs the solicitor had been ordered to pay personally. The court therefore held it should not determine the proceedings as presently constituted and should not make any orders in the absence of the client. (2) In considering whether to grant an adjournment the court must take into account the long delay in the proceedings, for which the solicitor was principally responsible, and the neglect of his client's interest during that period of delay. In view of this, it was simpler and clearer to dismiss the proceedings. (3) Costs of the present proceedings should be awarded against because the defect in the proceedings lay mainly at his door and was associated with the neglect of his client's interest, this being one of the discretionary factors which persuaded the court to dismiss the appeal. (4) It was not the intention of the court, in dismissing the proceedings due to a defect in their constitution, to decide any matter of substance which was raised. ORDERS Summons dismissed with costs. Priestley (1), Meagher (2) AND Sheller (3) JJA In this summons, we are going to say very little about the facts of the matter because of the course the court is taking. What needs to be said is this. The summons brought by Mr Coshott seeks an order quashing an order made by His Honour Judge Downs in August 1988 by which he ordered Mr Coshott to pay the costs of the defendant of proceedings in which Mr Coshott had been the solicitor for the plaintiff. The judge made the order that Mr Coshott personally pay the defendant's costs on the basis of what he perceived as shortcomings in the preparation of the plaintiff's case which had made it necessary for the plaintiffs counsel to seek an order for discontinuance of the proceedings. 2 UNREPORTED JUDGMENTS In this abbreviated narrative, the next thing necessary to mention is that Mr Coshott took the view that the order made by the judge against him would be set aside upon Mr Coshott's application to the Supreme Court because Mr Coshott had not been given an opportunity to be heard before the order was made against him. Had that been all that was involved in the case, there may have been something to be said for Mr Coshott's opinion. However, in the proceedings that were brought by the summons, Mr Coshott's client was not made a party. The order that had been made by his Honour Judge Downs was an order which was to the benefit of Mr Coshott's client. One consequence of the course taken by Mr Coshott was that his client's proceedings in the District Court having been discontinued were recommenced and then stayed by the order of that court pending compliance by Mr Coshott with the order for costs made personally against him. A further consequence is that those proceedings of that client in 1994 remain stayed. Clearly, once his Honour Judge Downs had made the costs order against Mr Coshott, a conflict of interest arose between Mr Coshott and his client. The existence of that conflict of interest, so far as the materials before the court in this summons go, has been ignored from August 1988 until today. The continued disregard of that conflict of interest, and of the interest of Mrs Jermanis in these proceedings, is demonstrated by the fact that she was not made a party to them After the argument today had proceeded for some little time, it became apparent to the court that Mrs Jermanis had a real interest in these proceedings. One possible result of the proceedings would be that, eventually, Mrs Jermanis might be ordered to pay the costs which Mr Coshott had been ordered personally to pay by his Honour Judge Downs. It thus became apparent to the court that Mrs Jermanis was, in substance, a necessary party to these proceedings. The court took the view, after consideration of this aspect of the matter, that the court should not determine the proceedings as presently constituted, and should certainly not make any orders in the absence of Mrs Jermanis which might be to her disadvantage, either today or at a later date. The question then arose what course the court should take. The only real alternatives, as the court saw them, were either to adjourn the proceedings to allow them to be amended or to dismiss them. In a great many situations, the court, having found itself in a position where an essential party is lacking, would choose the first of these alternatives. In the present case, however, considerations far from the ordinary ones apply. There has been very long delay in the bringing of these proceedings before the court. That delay has, for the most part, been the responsibility of Mr Coshott. In some part, it has been contributed to by the second opponent in the proceedings, the defendant in the District Court proceedings. Notwithstanding that last observation, however, that defendant was a defendant, and did not lie under the same obligations to the same extent to see that the matter was properly disposed of, as Mr Coshott did. His responsibility, whether he realised it or not, was to look after his client's interest before his own. In the present case, probably, that meant that he should have declined to continue to act for his client and seen to it that she was properly represented. In considering whether to grant an adjournment, as Mr Eassie asked, together with permission no doubt to amend, or to dismiss the proceedings, it seems to us we must take into account the long delay, for which Mr Coshott is principally responsible, and the fact that during the period of that delay his client's interest - and again we stress so far as the materials before us show - has been completely URJCOSHOTT v DOWNS and ANOR (Priestley (1), Meagher (2) AND Sheller (3) JJA) 3 neglected. It seems to us in the present case it is a much simpler and clearer course to follow to dismiss the proceedings and leave it to Mr Coshott to consider what he should do in the light of the considerations touched on in these reasons. This way, it may be that he will see fit not to continue to seek his goal of quashing the order of his Honour Judge Downs. Should he decide to take such a course, which will be a matter for him, his path will be the easier if there are no court proceedings still pending. The question arises, then, if the court does dismiss, as it intends to do, the proceedings, whether costs should be awarded against Mr Coshott. The court is of the view that they should be, because the defect in the proceedings not only lies at his door, it is a defect which is associated with one of the discretionary factors we take into account in deciding to dismiss rather than to adjourn, namely the neglect of the interest of his client by Mr Coshott throughout this very lengthy period while he sought to pursue his own interest in having the costs order against him set aside. The court's order, therefore, is that the summons is dismissed with costs. (The court heard argument on the question of costs.) There are two matters to add to what has already been said. Mr Eassie sought to be heard on the question of the costs order and pointed out substantially that the second opponent bore some share of the blame for the defect in the constitution of the proceedings not having been drawn to the court's attention long ago, and therefore, his client should not be visited with the whole of the costs. The court is of the opinion that, in the circumstances, his client should pay the whole costs of the proceedings. The reason for this can be illustrated by reference to a submission Mr Eassie made. He pointed out that had this question of parties arisen before the court, if the proceedings had been before the court two months after Judge Downs' order, then it is unlikely that the court would have taken the same view of the matter. That may be so, but the critical point is that it is getting on for six years after the making of Judge Downs' order that the matter has come before the court, and it is due to Mr Coshott in very great part that that position has come about, and it has come about not only to the detriment of the second opponent, who could be expected to have been able to look after itself in the interim, but also to the detriment of Mr Coshott's client, about whom the same can probably not be said. Thus, in the circumstances, the court is of the view that the costs order should be made as earlier announced. The other matter is that it is not the intention of the court, in dismissing the proceedings because of the defect in their constitution, to decide any matter of substance which was raised in the proceedings concerning the question of whether Judge Downs' costs order against Mr Coshott should be set aside. The court has not intended to say, and we do not think it has said, anything in the reasons so far given which expressed any opinion about that matter. Certainly it is not the intention that anything definitive should have been said about that central matter in the summons, and the result would be, so far as the court can see, that there is no res judicata or issue estoppel effected by the dismissal of the proceedings on the grounds upon which they have been dismissed. Summons dismissed with costs. Counsel for the claimant: RK Eassie 4 UNREPORTED JUDGMENTS Solicitor: Gunn Hamilton and Blay Counsel for opponent 2: SR Donaldson and D Stack Solicitor for opponent 1: Submitting Appearance Solicitor for opponent 2: Mallesons Stephen Jaques