New South Wales Supreme Court CITATION : Deputy Commissioner of Taxation v Rollason [2006] NSWSC 1032 HEARING DATE(S) : 28/09/06 JUDGMENT DATE : 28 September 2006 JUDGMENT OF : Gzell J EX TEMPORE JUDGMENT DATE : 09/28/2006 DECISION : No order. CATCHWORDS : PROCEDURE - Costs - Whether barrister and solicitor should be ordered to pay portion of the costs the defendant was ordered to pay to the plaintiff under the Civil Procedure Act 2005, s 99 - Defendant waives client legal privilege - Defendant advised by counsel not to defend - Defendant failed to comply with directions notwithstanding Associate's telephone calls - Plaintiff complied - Barrister and solicitor involved in proceedings for defendant before Administrative Appeals Tribunal - Plaintiff's counsel informed that Supreme Court proceedings unlikely to be defended - Court not informed and no variation or stay of the directions sought - Defendant requests no order be made against barrister or solicitor - Barrister and solicitor apologised to Court LEGISLATION CITED : Civil Procedure Act 2005 Re The Black Stump Enterprises Pty Ltd and Associated Companies (No 2) [2006] NSWCA 60 Ridehalgh v Horsefield [1994] Ch 205 CASES CITED : Lemoto v Able Technical Pty Ltd [2005] NSWCA 153 White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR Steindl Nominees Pty Ltd v Laghaifar [2003] 2 Qd R 683 PARTIES : Deputy Commissioner of Taxation - Plaintiff John Cameron Rollason - Defendant FILE NUMBER(S) : SC 4352/04 COUNSEL : Mr I E Davidson for Mr C Catt Ms J E Richards for Mr D Milne SOLICITORS : Australian Government Solicitor - Plaintiff McDonell Milne Toltz - Defendants IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION GZELL J THURSDAY 28 SEPTEMBER 2006 4352/04 DEPUTY COMMISSIONER OF TAXATION v JOHN CAMERON ROLLASON EX TEMPORE JUDGMENT 1 On 29 May 2006, Brereton J made a series of orders to which the solicitor for the defendant agreed. His Honour ordered that each party serve on the other and lodge with the trial judge's associate a list of pleadings and affidavits proposed to be relied upon by that party by 5 June 2006. The defendant's solicitor did not comply with that order so far as delivery of documents to the associate was concerned. 2 The second order made by his Honour was that each party serve on the other and lodge with the trial judge's associate a list of witnesses who were required for cross-examination and, in respect of each, the estimated time required for cross-examination by 12 June 2006. There was no compliance with that order in so far as it required lodgement with the trial judge's associate. 3 The third order was that each party serve on the other and lodge with the trial judge's associate a document that incorporated a chronology including essential facts for which the party contended, where relevant, a statement setting out the assets and liabilities of relevant parties, a skeleton argument and a list of authorities by 10 July 2006. No such document was lodged with the associate by the defendant. 4 The next order was that each party serve on the other and lodge with the trial judge's associate any affidavits that party would seek to have read for the purposes of curing objections by 7 August 2006. No such affidavits were lodged with the trial judge's associate. 5 Finally, his Honour ordered each party to lodge with the trial judge's associate an agreed bundle of documents to be tendered and a working bundle of pleadings and affidavits to be relied on at trial by 4 September 2006. No such bundles were lodged with the trial judge's associate. 6 The plaintiff lodged documents with the trial judge's associate in accordance with orders 1, 2 and 3. One may infer, as I do, that costs were incurred by the plaintiff in complying with those orders. 7 There were a number of telephone calls made by my associate to counsel and solicitor for the defendant seeking compliance with the orders, but to no avail. 8 When the matter came before me on 8 September 2006, I entered judgment for the plaintiff and ordered the defendant to pay the plaintiff's costs. Those orders were made by consent. I also ordered counsel and the solicitor for the defendant to show cause before me today why I should not make orders against them to pay the whole or part of the costs incurred by the defendant in the proceedings pursuant to the Civil Procedure Act 2005, s 99. 9 So far as is material for present purposes, the Civil Procedure Act 2005, s 99 provides that the section applies if it appears to the court that costs have been incurred by serious neglect, serious incompetence or serious misconduct of a legal practitioner. After giving the legal practitioner a reasonable opportunity to be heard, the court may do a number of things. It may, by order, direct the legal practitioner, in the case of a barrister, to pay to the instructing solicitor or client, or both, the whole or any part of any costs that the instructing solicitor or client, or both, have been ordered to pay to any other person, in the case of a solicitor, to pay to the client the whole or any part of any costs the client has been ordered to pay to any other person. 10 The provision has been considered, recently, by the Court of Appeal. In Re The Black Stump Enterprises Pty Ltd and Associated Companies (No 2) [2006] NSWCA 60, Young CJ in Eq, who gave the judgment of the court, referred to Ridehalgh v Horsefield [1994] Ch 205 at 229 and Lemoto v Able Technical Pty Ltd [2005] NSWCA 153 at [92] where it was said that the jurisdiction to order a legal practitioner to pay the costs of legal proceedings in respect of which he or she provided legal services must be exercised with care and discretion and only in clear cases. 11 Reference was also made to similar propositions stated in White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR at 169 and at 239 and in Steindl Nominees Pty Ltd v Laghaifar [2003] 2 Qd R 683 at 689. 12 Since ordering counsel and solicitor acting for the defendant to show cause why I should not make an order under the provision, I have had the advantage of affidavits from the barrister, the solicitor and the defendant. I have also had the advantage of submissions by counsel representing the barrister and counsel representing the solicitor. 13 As well as the proceedings in this court, there were proceedings before the Administrative Appeals Tribunal between the same plaintiff and defendant. Those proceedings took the time of both the barrister and the solicitor acting for the defendant in these proceedings. As counsel put it, because of the time devoted to the proceedings in the tribunal, perhaps less attention than might otherwise have been paid, was given to the orders made by Brereton J. 14 It became clear to counsel, and he has deposed to the fact, the defendant having released client legal privilege attached to the communication, that the Supreme Court proceedings should not be defended. That the Supreme Court proceedings were unlikely to be defended was communicated by counsel for the defendant to counsel for the plaintiff on 1 August 2006 and again on 5 September 2006. Those dates were subsequent to the material dates in the orders made by Brereton J. But, nonetheless, they indicate that the plaintiff was informed of the likelihood that the matter would not proceed and, no doubt, the communications had an effect on the generation of further costs by the plaintiff. There was a delay between advice to the defendant not to defend the Supreme Court proceedings and his giving instructions to that effect. 15 It would have been appropriate for the court to have been asked to vary or even to stay the orders of Brereton J pending the determination by the defendant that he would not defend the Supreme Court proceedings. Orders such as those made by Brereton J are not only for the benefit of the parties in apprising them of the case they have to meet. They are also for the benefit of the court in enabling the judge assigned to the case to understand the issues involved before going on the bench. This is particularly so of the Expedition List within the Equity Division of the court from whence this matter was set down. Brereton J noted that no party objected to the trial judge reading the affidavit evidence in advance of the hearing and the matter was set down for one day, the trial judge, if necessary, to allocate time between the parties to ensure that the matter finished within the day. 16 What appears to have happened is that the parties were aware of the likelihood that the matter would not proceed, but the court was not informed of that circumstance. 17 The affidavit of the defendant is, in my view, significant. He swears that he does not consider that the conduct of either the barrister or the solicitor increased his costs of the proceedings. He says that they at all times acted in accordance with his instructions, and he respectfully asks the court not to make orders against them to pay any part of his costs. 18 The increase in costs relevant to this matter are the costs of the plaintiff in complying with the orders made by Brereton J. They apply to the defendant because he was ordered to pay the plaintiff's costs. But in light of his affidavit, in light of the explanations that have been given by the barrister and the solicitor, and in light of the apologies that have been given to the court by both the barrister and the solicitor, I am of the view that this is not an appropriate case to invoke the Civil Procedure Act 2005, s 99 and I will not do so. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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