LawCover Insurance Pty Limited v Nicholas Mitchell Coren [2013] NSWSC 76

Supreme Court New South Wales

Medium Neutral Citation: LawCover Insurance Pty Limited v Nicholas Mitchell Coren [2013] NSWSC 76 Hearing dates: 6 February 2013 Decision date: 06 February 2013 Jurisdiction: Equity Division Before: Sackar J Decision: Category: Principal judgment Parties: LawCover Insurance Pty Limited - plaintiff Nicholas Mitchell Coren - defendant Representation: Counsel: P Silver - plaintiff F Corsaro SC - defendant File Number(s): 2012/380612

Judgment Ex tempore (revised 11 February 2013) 1By summons dated 7 December 2012, LawCover, the plaintiff, seeks a declaration that it is entitled by reason of a number of clauses of the relevant professional indemnity policy to settle an application against Mr Coren, solicitor, to the effect that he personally pay the costs of proceedings in which he was solicitor on the record for an unsuccessful plaintiff. There is related relief also claimed. 2The application for costs against Mr Coren is listed for hearing, as I understand it, on or about 21 February 2013. Mr Coren is insured by LawCover, under the terms of its professional indemnity policy for 2011/2012. He, however, opposes the relief sought by LawCover.

THE FACTUAL BACKGROUND 3Mr Coren was the solicitor on the record for a Ms Halina Jain Gillett in proceedings brought by her in this Court in matter number 2006/267258 against a Professor Jeffrey Robinson, an obstetrician. 4The proceedings were medical negligence proceedings. A trial in the matter took place before Harrison J on 1 to 3 and then 5 August 2011. Other than an amendment application on the first day of the trial which was argued by Mr Connor of senior counsel, Mr Coren appeared for Ms Gillett throughout the balance of the trial. 5On 26 September 2011 the trial judge delivered judgment in which he ordered a verdict for the defendant. The question of costs has been deferred since that time at the request of the parties. I should observe that a notice of intention to appeal was subsequently filed. By that time Mr Coren had ceased to act for the plaintiff. However, an application to extend the time for the filing of the notice of appeal which was filed by the plaintiff in May of 2012 was dismissed by Barrett JA on 31 August 2012. 6The defendant (Professor Robinson) in the main proceedings in a motion dated 30 September 2011 seeks orders to the effect that the plaintiff (Ms Gillett) pay the costs of the defendant on an indemnity basis and that Mr Coren indemnify the plaintiff in relation to those costs. 7On 9 November 2011 LawCover informed Mr Coren, that it granted him indemnity for that claim. The then solicitor for LawCover, Mr Lusk, recommended to Mr Coren that the costs application be settled as soon as possible. Mr Coren was asked for his response. 8On 2 December 2011 LawCover instructed Mr Lusk that the costs application should be settled. Mr Coren raised a number of matters that he wanted LawCover to consider. 9On 14 December Mr Lusk informed Mr Coren that he had considered all of the various matters raised by him but that LawCover had made a formal determination that the costs application should be settled and recommended a figure of some $290,000 including interest and costs. 10Thereafter on 22 December Mr Coren requested that Mr Lusk arrange for the advice from an independent legal practitioner, it seems, within the terms of clause 21 of the policy. Mr Coren ultimately indicated he would accept the opinion of Mr Darke of counsel, who was one of a number of practitioners nominated. Mr Darke was retained. 11Mr Darke was provided with relevant materials including submissions from Mr Coren and in turn provided his opinion on 10 May 2012. Mr Coren took the step of sending further submissions to Mr Darke, on both 27 and 28 May. Mr Darke thereafter indicated that the further submissions of Mr Coren did not alter his opinion. 12It was not until 21 June, or so it seems, that Mr Coren received Mr Darke's opinion, but nothing turns upon that. 13In a detailed and thorough analysis Mr Darke expressed the view that the defendant's claim for a personal costs order against Mr Coren should be settled, if possible, rather than defended and up to 90 per cent of the costs claimed. Mr Darke concluded that he thought Mr Coren would be found by a court to have provided legal services to the plaintiff on her claim against Professor Robinson in circumstances where it could be suggested that there were no reasonable prospects of success. Mr Darke expressed the view, that that was probably the case at all times since the proceedings were commenced. He thought, therefore, that the court's discretion to make an order that Mr Coren pay the plaintiff for the whole or any of the costs for which she may be liable would be enlivened. In the circumstances Mr Darke also thought that a court would probably order such costs on an indemnity basis. He also thought that the order for indemnity costs could date from as early as 28 November 2007, or perhaps a little later from 24 February 2009. 14In or about June or July 2012 Mr Coren wrote to LawCover complaining about their use, or continued use, of Mr Lusk and his firm and advanced various reasons why they should desist from doing so. Those complaints were to the effect that Mr Lusk and/or his firm acted for LawCover in other matters which involved Mr Coren; that Mr Lusk had in fact briefed Mr Harrison of senior counsel, as he then was, and that one or other of those factors had somehow tainted the whole process. 15I should say at the outset, although it is not necessary for me to do so, there was no substance nor could there be any substance whatsoever in the complaints made by Mr Coren about Mr Lusk, his firm, or indeed any conduct that they or anyone else had engaged in during that time. 16Unsurprisingly therefore, LawCover rejected the suggestion and on 17 July 2012 stated that it intended to progress settlement discussions. 17Mr Coren asserted that in some fashion or other Mr Darke's advice should still be seen as affected by the taint or conflict of interest and maintained his position in that regard. Mr Lusk's firm withdrew, or perhaps had their retainer terminated mutually by agreement with LawCover, although Mr Lusk made it very clear that he rejected out of hand that there was any substance in any of the complaints Mr Coren had voiced. 18LawCover thereafter appointed Sparke Helmore to act as its new solicitors, and on 20 August it wrote to Mr Coren. LawCover, in that letter denied that it was obliged to change solicitors but nonetheless indicated that it was prepared to engage in a process of obtaining a further opinion from counsel. It will be necessary to briefly turn to the terms of that letter shortly. 19By about this time a Mr Mason, solicitor of Mason Lawyers, began to act for Mr Coren. There is no information before the court from Mr Coren or otherwise as to, the precise circumstances in which Mr Mason was retained or, indeed, if it be the fact, when his retainer was terminated, although that appears to have occurred later in the year. Again, it is a matter to which I will return. 20Mr Mason, however, asked be to provided with certain materials including, it seems, a copy of Mr Darke's opinion. On 29 August Mr Mason indicated that his client would be agreeable, in broad terms, with the proposal, it seems, put in the letter of 20 August from LawCover. That is, agreeable to the obtaining of a fresh opinion from counsel but he indicated his client wanted to ensure that he had some reasonable input into the brief. Mr Mason indicated that he was awaiting instructions and he hoped to get a formal response the next day. 21On 3 September Mr Mason indicated that his client was agreeable to Mr Studdy SC (amongst others) being briefed and set out further conditions, including that Mr Studdy provide his opinion by 16 November. LawCover indicated that it was agreeable to those conditions. 22Thereafter the solicitor for LawCover, not having heard from Mr Mason or from anyone else on behalf of Mr Coren or, indeed, from Mr Coren himself, forwarded the brief and supporting materials that had been outlined and foreshadowed in correspondence with its submissions to Mr Studdy on 5 October. 23On 11 October Mr Studdy emailed the solicitor for LawCover and Mr Mason indicating he had received the LawCover submissions but observing that he had received no materials from Mr Coren. There is no evidence to suggest that that email was not received by Mr Mason. Mr Mason has not provided any evidence to the court. However, in his affidavit, Mr Coren indicates that according to him, at least, he received nothing from Mr Mason after about 20 August. 24I am not obliged to accept Mr Coren's assertion to that effect. There is, however, I should observe, no material to the contrary but I find it very surprising, given the circumstances of this case, that Mr Mason, at least on Mr Coren's view of it, simply ceased to communicate with Mr Coren on or after 20 August. Were that so, given his attitude generally, I would have expected Mr Coren to have either made direct contact with LawCover or at least ensured he was, as it were, in the loop. 25LawCover, on the other hand, on 12 November attempted to contact Mr Mason. The solicitor for LawCover, Ms Wright, attempted to contact him again on 13 November, both by telephone and by email. Neither of those attempts proved successful. 26On 15 November 2012 Mr Studdy emailed his opinion to LawCover and to Mr Mason. In his opinion Mr Studdy followed a very similar analysis to that of Mr Darke however in a much more concise exercise expressed, in substance, the same view, namely, that the costs application be settled for an amount up to, he thought, $263,000 including interest and costs. 27On 19 November Ms Wright emailed Mr Mason to the effect that LawCover was taking steps to settle the cost application in accordance with Mr Studdy's opinion. A letter was sent to Professor Robinson's solicitors on 22 November offering that the matter be settled for $263,000. 28On 29 November, the solicitor for LawCover emailed Mr Mason indicating that it considered that it had authority to settle the cost application and referred to both the opinions of Mr Darke and Mr Studdy. Further, she indicated that her client intended to act in accordance with the opinions pursuant to its authority under the policy. 29On 30 November Mr Coren emailed the solicitor for LawCover. He indicated that he objected to the settlement and he denied he was bound by Mr Studdy's opinion on the basis that he had not had input into the terms of Mr Studdy's retainer and that LawCover had failed to ensure that submissions in support of Mr Coren's position were obtained. 30He also indicated that he wanted his contribution to Mr Darke's fees repaid to him and he would not pay any money, so he said, in relation to Mr Studdy's opinion. He indicated further he would provide a statement of issues limited to two pages, including his submissions, on or by 3 December. 31On 2 December Mr Coren sent the solicitor for LawCover a five page submission which it seems he intended Mr Studdy consider. 32I observe that having read that submission it does not appear to me, at least, to address issues that were germane to the costs application. Rather it seeks to agitate alleged errors on the part of Harrison J in his handling of the trial. 33On 4 December the solicitor for LawCover sent an email to Mr Coren rejecting suggestions that he had made in his email of 30 November and stating that her client had authority to settle the costs application. On the same day, Mr Coren emailed the solicitor for LawCover and asked her to inquire what Mr Studdy's fees would be for him to consider Mr Coren's submissions of 2 December and to provide comments on them. 34Nothing further seems to have been done in relation to Mr Coren's request. It seems to me entirely unsurprising given the content of those submissions. 35In any event, on 5 December the solicitor for LawCover sent an email to Professor Robinson's solicitor offering to settle the matter subject to LawCover obtaining declaratory orders confirming its authority to do so. 36On 6 December Professor Robinson's solicitors emailed the solicitor for LawCover accepting the offer to settle for $263,000 inclusive of costs and interest but on the basis that any settlement be subject to LawCover obtaining declaratory relief to confirm its authority to settle.