Walton v Walton [2015] NSWSC 409

Supreme Court New South Wales

Medium Neutral Citation: Walton v Walton [2015] NSWSC 409 Hearing dates: 10 April 2015 on the papers Decision date: 13 April 2015 Jurisdiction: Equity Division Before: Stevenson J Decision: Legal practitioner's costs of the costs application disallowed and practitioner ordered to pay to the plaintiff 90 per cent of the costs she is ordered to pay the defendants Catchwords: LEGAL PRACTITIONER – costs – where plaintiff ordered to pay defendants' costs – plaintiff's solicitor's costs of the costs application disallowed as between the solicitor and plaintiff – plaintiff's solicitor ordered to pay to the plaintiff 90 per cent of the costs of the costs application that she is ordered to pay the defendants Legislation Cited: Civil Procedure Act 2005 (NSW) Cases Cited: Walton v Walton [2015] NSWSC 218 Walton v Walton [2015] NSWSC 405 Harris v Villacare Pty Limited [2012] NSWSC 452 Category: Procedural and other rulings Parties: Lynda Joyce Walton (Plaintiff) Peter George Walton (First Defendant) Helen Walton (Second Defendant) Representation: Counsel: M McHugh SC (for S Neagle)

Solicitors: Neagle Lawyers (Plaintiff) Emil Ford Lawyers (Defendants) File Number(s): SC 2012/382828

Judgment 1. I gave judgment in these proceedings on 16 March 2015, dismissing the plaintiff's claim: Walton v Walton [2015] NSWSC 218. 2. On 1 April 2015 I heard argument as to costs and ordered that the plaintiff pay the defendants' costs: Walton v Walton [2015] NSWSC 405 at [34(2)]. 3. I also ordered that the plaintiff's solicitor, Mr Shane Neagle, show cause by 10 April 2015 why I should not: 1. pursuant to s 99(2)(a)(ii) of the Civil Procedure Act 2005 (NSW), as between Mr Neagle and the plaintiff, disallow Mr Neagle's costs of the costs application, including of the preparation of the "Plaintiff's Court Book – Costs Application" and the affidavits sworn by him, by the plaintiff, and by Ms Robyn Anne Walton and Ms Elizabeth Mary Atkinson; 2. pursuant to s 99(2)(b)(ii) of that Act, order Mr Neagle to pay to the plaintiff the costs that I ordered the plaintiff to pay the defendants, so far as those costs arise from the costs application; and 3. refer my reasons of 1 April 2015 to the Law Society of New South Wales with a view to the Law Society considering whether Mr Neagle has engaged in professional misconduct or unsatisfactory professional conduct: Walton v Walton [2015] NSWSC 405 at [34(3)] and [34(4)]. 1. I have now received an affidavit sworn by Mr Neagle on 10 April 2015, together with written submissions from Mr Michael McHugh SC. 2. In his affidavit, Mr Neagle said that he did not "take issue with or oppose" costs orders to the effect set out at [3(a) and (b)] above, but asked that the "professional conduct referral not be made". 3. Mr Neagle said: "I can assure the Court this has been a watershed moment in my professional life. As a result of these and other events I am intending to take extended leave, and am reassessing my practice, including with [sic] no longer accepting emotionally charged work altogether. Having taken significant time and advice to reflect on my approach to the costs application and the ex tempore reasons [of 1 April 2015], I fully appreciate my conduct could reasonably be seen to fall below the standard expected of a legal practitioner. I apologise unreservedly to the Court, my opponent and the defendants for that conduct." 1. Mr Neagle gave a detailed account of his "recent personal circumstances" and said that: "I believe I would normally have attended to the costs application and my affidavit and those others filed on the costs application with much more care, moderation and circumspection, but did not do so because of the stress and fatigue I was under at the time." 1. Mr Neagle then set out, in some detail, the "[b]ackground to the costs application", what he described as the "[c]ollegial [s]upport" he had received in preparing the material referred to in my 1 April 2015 judgment (including consultations with a number of unnamed junior counsel and senior solicitors) and his "reasoning for adducing and submitting on particular matters properly and necessarily addressed by the ex tempore judgment [of 1 April 2015] at paragraphs [28], [29] and [30]". 2. Mr Neagle said that: "In doing so I do not cavil with the findings therein. I accept them unreservedly." 1. In his affidavit in support of the costs application, Mr Neagle referred to the "history" between him and the defendants' solicitor: see [28(f)] of my 1 April 2015 reasons. In his 10 April 2015 affidavit , Mr Neagle said: "I acknowledge that I should not have included these matters in my affidavit and apologise to the defendants' solicitor and the Court for having done so". 1. So far as concerns the matter referred to at par [30] of my 1 April 2015 judgment, Mr Neagle said in his 10 April 2015 affidavit: "I now fully appreciate that the adducing of such a serious allegation and my repetition of it was in no way justified by my (faulty) reasoning process. It was properly found to be disgraceful conduct". 1. Mr McHugh submitted that the matters set forth in Mr Neagle's affidavit warranted the conclusion that referral of the matter to the Law Society was no longer warranted and that: "…the insight demonstrated by Mr Neagle in his evidence today tells against a recurrence of the matters that led to his substantiated complaint and his conduct here. He has recognised that he needs to take stock of what has led him into error, evidenced by his intention to take extended leave, and reassessing his practice." 1. Mr McHugh also submitted that notwithstanding Mr Neagle's "appropriate" admission that I have set out at [6] above, his conduct could not be said to rise to the level of professional misconduct. 2. Mr McHugh concluded: "In all the circumstances, there is no utility in making the professional conduct referral. He has and will be appropriately 'punished' and the public policy reasoning behind the objects of the professional conduct provisions – protection of the public – would not be infringed in declining to make the professional conduct referral." 1. I have given careful consideration to Mr McHugh's measured and thoughtful submissions, but am not able to accept them. 2. It is not appropriate that I express any view about whether Mr Neagle's conduct is, or is not, professional misconduct or unsatisfactory professional conduct. It is, however, appropriate that the Law Society consider that question so that it can consider what, if any, further action is appropriate. In my opinion, the public interest does require that I refer my reasons of 1 April 2015, and these reasons, to the Law Society. 3. So far as concerns the question of costs, Mr McHugh submitted that: "…despite Mr Neagle's non-opposition, there is scope for limiting his contribution of the defendants' costs order to reflect the actual consequences." 1. Mr McHugh drew my attention to the decision of RS Hulme J in Harris v Villacare Pty Limited [2012] NSWSC 452. In that case, one of the matters that his Honour considered was an affidavit sworn by a solicitor in the proceedings which was some 83 pages in length and which his Honour described as a "waste of paper" (at [31]). Nonetheless, his Honour concluded that "only something of the order of 90%" of the affidavit was a waste and, with a "desire to adopt a conservative view", confined an order under s 99 of the Civil Procedure Act to 80 per cent of the costs in question (at [68]). 2. In this case, Mr McHugh submitted that: "…it cannot be said that the costs application had no prospect of success and [was] doomed to fail. Hence, any order for Mr Neagle to pay the defendants' costs order should be limited to the extra costs caused by the impugned passages of the affidavits criticised. It is submitted, that cannot be any greater than 50% - the court book, although extensive contained largely documents already on the court file and in the possession of the defendants. Other than the costs submissions and affidavits, the extent of other materials, such as emails and letters were not extensive." 1. I accept Mr McHugh's submission that the defendants would have incurred some costs on the costs application in any event. However, as I pointed out in my reasons of 1 April 2015 (at [2]), but for the material adduced by Mr Neagle, costs would have been dealt with on the papers. There would have been no cause for the defendants to engage their solicitor to brief counsel to appear on the costs application and to have their solicitor and counsel peruse the large folder of material (little or none of which was, in my opinion, relevant). 2. In those circumstances, I consider it appropriate that Mr Neagle pay 90 per cent of the costs. 3. Accordingly, pursuant to s 99(2) of the Civil Procedure Act I order that: 1. As between Mr Neagle and the plaintiff, Mr Neagle's costs of the costs application, including the preparation of the "Plaintiff's Court Book – Costs Application" and the affidavits sworn by him, by the plaintiff, and by Ms Robyn Anne Walton and Ms Elizabeth Mary Atkinson, be disallowed. 2. Mr Neagle pay to the plaintiff 90 per cent of the costs that I have ordered the plaintiff to pay to the defendants, insofar as those costs arise from the costs application. 1. I propose to refer these reasons, and those of 1 April 2015, to the Law Society for it to consider what, if any, further steps should be taken concerning the matters referred to in those reasons.