New South Wales Supreme Court CITATION : Spence v Leitch [2010] NSWSC 477 HEARING DATE(S) : 30 April 2010 and 12 May 2010 JUDGMENT DATE : 20 May 2010 JUDGMENT OF : Harrison J DECISION : The costs of appearances before me on 16 March 2010, 30 April 2010 and 13 May 2010 and the costs thrown away or occasioned by reason of the vacation of the hearing scheduled to commence on 22 March 2010, including the costs of the appearance on that day, be the defendants' costs in the cause. CATCHWORDS : COSTS – vacated hearing – where plaintiff's solicitor given leave to cease to act – where hearing vacated through no fault of defendants – costs thrown away or occasioned by reason of vacated hearing to be defendants' costs in the cause CATEGORY : Procedural and other rulings PARTIES : Allan Spence (Plaintiff) Robert Royce Leitch, James Paul Hasson, Andrew Peter Dent and Martin Gerard Dunne t/as Leitch Hasson Dent Solicitors FILE NUMBER(S) : SC 2008/289189 COUNSEL : A R Lang (Plaintiff) M C L Dicker (Defendants) SOLICITORS : Lawjet (Plaintiff) Yeldham Price O'Brien Lusk (Defendants) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION PROFESIONAL NEGLIGENCE LIST HARRISON J 20 May 2010 2008/289189 Allan Spence v Robert Royce Leitch, James Paul Hasson, Andrew Peter Dent and Martin Gerard Dunne t/as Leitch Hasson Dent Solicitors JUDGMENT 1 HIS HONOUR: This matter was listed for hearing commencing on 22 March 2010 with an estimate of two weeks. On 16 March 2010 the plaintiff's former solicitor made an application for leave to file a notice of ceasing to act. I granted that leave and made a consequential order vacating the hearing. These reasons are concerned with the question of who should pay the costs associated with these events, including appearances on 16 March 2010, 22 March 2010, 30 April 2010 and 13 May 2010, but in particular the costs thrown away or occasioned by reason of the vacated hearing. Background 2 When dealing with the application by the plaintiff's former solicitor to which I have just referred I gave reasons for my decision that included the following: "The plaintiff, although not present today, has, so the evidence reveals, been informed that his present solicitors are proposing to make this application. It seems to me, having regard to Mr Cossalter's affidavit, that the relationship of solicitor and client between them and the plaintiff has already broken down, and that, given the shortness of time between now and the commencement of the hearing scheduled on 22 March next, there is little, or in practical terms, no likelihood that either alternative solicitors could be retained in time or that, having regard the other material before me, the plaintiff would be in a position to proceed to conduct the litigation by himself." 3 I directed that the matter be listed before me on 22 March 2010 for directions. That is what occurred. 4 The circumstances that gave rise to the solicitor ceasing to act for the plaintiff followed the service of an offer of compromise by the defendants on 15 February 2010. At that time the plaintiff was in Thailand having travelled there on 1 February 2010. He did not return until 16 March 2010. During the time that the plaintiff was in Thailand he would on one view appear to have become ill with what is described as a heart condition. When he returned to Sydney he attended Canterbury Hospital where he stayed between 16 March 2010 and 18 March 2010. He was discharged with a recommendation that he see his usual cardiologist. He sent an email to his former solicitor the following day advising him that he had been in hospital with a suspected heart attack. 5 The plaintiff did not attend Court on 22 March 2010. Nor was he represented even though he has since retained a new solicitor who has instructed counsel to appear for him. The solicitor for the defendants advised the plaintiff's new solicitor of what happened on that day, including that the matter was next back in Court for directions before me on 30 April 2010. That letter foreshadowed the present application for costs. 6 The solicitor for the defendants was not informed that the plaintiff had gone to Thailand until 26 February 2010. Between that day and 11 March 2010 there was extensive correspondence between the solicitors recording ultimately unsuccessful attempts to settle the proceedings. No indication was given to the solicitor for the defendants during that correspondence that the plaintiff was unwell or was for that or any other reason having difficulties giving instructions to his lawyers or receiving advice from them about settlement or the proceedings in general. 7 On 10 March 2010 the plaintiff sent an email to his solicitor from Thailand in these terms: "My instructions stand. As you sanctioned my medical treatment for life threatening heart condition. I simply can't take this pressure you are applying and risk death. I am very close to exploding NOW!" 8 Another email to his solicitor was sent by the plaintiff from Thailand on 12 March 2010 as follows: "I have been in urgent contact with my treating DR. Papacostas due to warned threatening calls which has severely deteriorated my health. As you were aware of my medical treatment and time returning Tue 16 March early in the morning. Due to medical advice that can be confirmed by direct contact with the doctor (in file). I request the motion received last night would be impossible to attend without complete medical examination as scheduled. Please inform the court well in advance." 9 The solicitor's response was sent 13 minutes later on the same day as follows: "I will not inform the Court of your non attendance as the matter is to commence Tuesday week and accordingly we are seeking to be taken off the register as you refuse to listen to advice. You have refused to take my calls to discuss the matter and while I believe that the offer from the defendant is exceptional you do not want to discuss this or your options with me. You may inform the Court of your position and we again note that if we cannot discuss this with you openly prior to Tuesday, we will be pressing for the motion to proceed. Again I will attempt to call you in 15 minutes for the 3rd time today and I hope that we will finally be able to discuss this matter." 10 On 15 March 2010 the defendants' solicitor received an unsworn affidavit dated 14 March 2010 apparently prepared and sent to her directly by the plaintiff. That affidavit was tendered by the plaintiff's former solicitor in his application before me on 16 March 2010 and became exhibit "A". Part of it was as follows: "2. Request the courts indulgence on this matter. Adjournment be granted of motion citing serious medical reasons and overseas at present (Annexure hereto and market [ sic ] 'A'. 3. Object to intention of ceasing to act filled [ sic ] 10 Mar 2010. All proceedings halted, both defendant and plaintiff solicitors are investigated by the Supreme Court and NSW police for attempted murder charges based on known medical evidence, ADT, law Society be instructed to investigate the corrupt action and blatant illegal practice, stand over, collusion and endangering life. 4. I will need court appointed Barrister under the appropriate act to attend on my behave [ sic ] to protect and instruct the Supreme Court. Informed Supreme Court judges and previous appointed Barrister under the court." 11 Annexure 'A' was in these relevant terms: "10-Mar-10 Warned GMP exploding 12-Mar-10 Informed GMP to adjourned motion 12-Mar-10 GMP refuse to accept URGENT instruction 13-Mar-10 Cover header A." 12 It will be apparent that the plaintiff's medical problems on his return to Australia developed or emerged within about one week of the conclusion of this correspondence. 13 Part of my reasons for the decision I came to on 16 March 2010 included the following: "In support of it Mr de Greenlaw reads the affidavit of David Cossalter sworn 10 March 2010. I have read that affidavit. In brief Mr Cossalter deposes to what appears to be a complete breakdown in the relationship between the plaintiff and his firm in a way that will make it impossible for the plaintiff's present solicitors to be properly instructed on his behalf for the upcoming hearing." 14 Mr Cossalter's affidavit of 10 March 2010 did not annex or refer to the email correspondence on 10 March 2010 and 12 March 2010 to which I have earlier referred. However, the affidavit was in the following relevant terms: "4. On 3 March 2010 I provided the plaintiff with advice as to the Offer of Compromise which comprised of advice that I had received from both Counsel and Senior Counsel. 5. On 5 March 2010 I received instructions from the plaintiff as to his position on settlement and on the afternoon of 5 March 2010 I entered into negotiations with the defendant solicitor. 6. At the conclusion of the discussions I had received instructions from the plaintiff as to his position and the discussions were left to be concluded on Monday. 7. On 8 March 2010 I received email correspondence from the plaintiff that his instructions given on 5 March 2010 were withdrawn. I received further instructions and proceeded to attempt to negotiate on this basis. 8. On 9 March 2010 I received confirmation that the instructions given on 8 March 2010 by email dated 7 March 2010 stood. 9. On 10 March 2010 I received further correspondence from the plaintiff that his instructions had once again changed. 10. At this point I was unable to negotiate further with the defendant as the plaintiff would not listen to advice and continuously altered his instructions." 15 It seems to be a clear and available inference that the plaintiff did not take up the solicitor's request in his email sent on 12 March 2010 to provide him with further instructions and that the solicitor's attempts to speak to the plaintiff by telephone as foreshadowed in that email were also unsuccessful. Consideration 16 The plaintiff submits that his illness in Thailand made considering the offer of compromise and taking advice or giving instructions in relation to it extremely difficult for him. He also contends that although he had been released from hospital beforehand he was still so unwell on 22 March 2010 that he was unable to attend Court on that day. Unfortunately, the medical evidence does not support that proposition. Counsel for the plaintiff quite properly acknowledged that he was not able to submit that the trial listed to commence on 22 March 2010 could not have proceeded because of the plaintiff's medical condition. There is evidence upon the basis of which this faint suggestion appears to emerge or be implied but when confronted with the issue directly the suggestion was discarded. The transcript that follows shows this: "HIS HONOUR: Are you able to or do you submit that the trial could not have gone on notwithstanding anything that happened between Mr Spence and his solicitors by reason of his medical condition? That would be a different matter. LANG: I am in somewhat of a difficulty." 17 The plaintiff did not dispute that there had been a breakdown in the relationship between him and his former solicitor. He acknowledged that the defendants were not at fault for that. However, the plaintiff submitted that even if his condition was not such as would on medical grounds have entitled him to an adjournment, the evidence revealed that he was under considerable emotional stress. Whether that was caused by or was the cause of what happened between him and his former solicitor is unclear. 18 The defendants also suggest that the plaintiff's decision to travel to Thailand for about six weeks and to plan to return less than a week prior to the commencement of the hearing was unwise and probably related to what happened. Whether or not this submission can be maintained, the plaintiff was in contact with his solicitor by telephone and email and there is no suggestion that the case was not otherwise going to be ready for trial as scheduled if it had not been for the fact that he parted company with his former solicitor. 19 There is another matter that should not be overlooked. The plaintiff's current solicitor and counsel have not yet received the file in this matter from the former solicitor. Although no submission is made that I should postpone consideration of the costs issue until the file is available, and even though the defendants have offered to supply missing documents to the plaintiff (although not free of cost), I remain concerned that the whole picture may not have yet fully emerged. 20 There is no doubt that the plaintiff should not have or become entitled to any of the costs for the appearances and lost hearing days that are in issue. There is also no dispute that the defendants should have an order providing in some way for their costs of these appearances and for the lost hearings days. I am informed that the plaintiff wishes to have the matter referred again for mediation. It is therefore of some importance that the parties have a clear understanding of the status of the costs issue if there is to be a mediation or if the matter is to be heard and decided in the usual way. 21 The plaintiff submitted that the highest that the defendants' entitlement can rise is to an order that the costs in issue be the defendants' costs in the cause. The defendants argue that they should have their costs and that the plaintiff's suggestion would mean that they would only be compensated for the lost costs in the event that the matter went to a hearing and they were successful. Inferentially the defendants contend that such a result may not in the end compensate them for the costs they have incurred through no fault of their own. Conclusion and orders 22 In my opinion the plaintiff's submission should be accepted. I have a strong impression that the plaintiff's failure to be able to proceed to run his case on 22 March 2010 was not altogether or by any means only as the result of factors over which he had complete control. Some allowance for these factors, including what appears to be his emotional inability to deal with what was confronting him in middle to late March 2010, needs to be made. Although the defendants are entirely blameless, they will be entitled to their costs if in due course the plaintiff's case is found to be without merit. 23 I consider that the following orders should be made: 1. Order that the costs of appearances before me on 16 March 2010, 30 April 2010 and 13 May 2010 and the costs thrown away or occasioned by reason of the vacation of the hearing scheduled to commence on 22 March 2010, including the costs of the appearance on that day, be the defendants' costs in the cause. ********** 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.