Slattery v Fordyce; Fordyce v Slattery (No 2)

1. [1]

   HIS HONOUR: On 13 June 2018, an appeal was brought by a further amended summons filed in Court on 13 June 2018 (“the further amended summons”) from a decision of Pierce LCM of 10 July 2017, insofar as that judgment determined that Ms Rhonda Daily Slattery (“the plaintiff”) was liable to pay the professional costs of Mr Paul Mervyn Fordyce (trading as PMF Legal) (“the first defendant”) and a consequential order for the plaintiff to pay indemnity costs to the first defendant. There were also other defendants, party to those proceedings, which were not found to be the subject of any liability.

2. [2]

   On 16 March 2018, the first defendant filed an amended cross-summons (“the cross appeal”), effectively seeking to have the remaining defendants declared party to the First Costs Agreement and the obligations to pay professional costs arising therefrom.

3. [3]

   The relevant background to the further amended summons and the cross appeal (collectively, “the applications”) was set out in Slattery v Fordyce; Fordyce v Slattery [2019] NSWSC 173 (“Slattery No 1”) at [9]-[46].

4. [4]

   On 28 February 2019, the Court gave judgment in relation to the applications: Slattery No 1.

5. [5]

   In Slattery No 1, the Court reached the following conclusions at [306]-[308]:

6. [6]

   It may be observed that the first defendant was wholly successful on the applications.

7. [7]

   The Court made the following directions (at [309]):

8. [8]

   The Court received several communications from the first defendant responsive to those orders as well as requests for extensions by Mr Slattery on behalf of the plaintiff. Several extensions were granted to the plaintiff to afford her the opportunity to reply, which was also reflected in the program fixed with respect to the first defendant’s application for costs and subsequent variations to that same timetable.

9. [9]

   On 12 April 2019, the following orders were executed under seal in Chambers:

10. [10]

    That same day, a program for the receipt of submissions with respect to the first defendant’s application as to costs was also fixed. The plaintiff, Dee-Tech Pty Ltd (“the third defendant”) and Bright Star Laundry Pty Ltd (“the fourth defendant”) were directed to file and serve submissions or evidence in reply on or before Wednesday, 24 April 2019, with the matter of costs to be determined on the papers. As at the date of this judgment, notwithstanding multiple extensions, the plaintiff (as well as the third and fourth defendants)did not file and serve any written submissions or evidence responsive to the present application for costs before the Court. The last extension, which again passed without compliance, was provided via an email to the parties on 4 June 2019, was in the following terms:

11. [11]

    By a notice of motion filed and served on 9 April 2019, a draft of which was provided on 14 March 2019 to the Court and to the plaintiff, the first defendant sought the following orders:

    1. (1)

       The plaintiff to pay the first defendant's costs of the appeal on the ordinary basis.

    2. (2)

       There otherwise be no order as to costs of the appeal.

    3. (3)

       The first, second and third cross defendants to pay the cross claimant's costs of the cross appeal on the ordinary basis.

    4. (4)

       The plaintiff / first cross defendant and the second and third cross defendants to pay the first defendant / cross claimant's costs of this application for costs.

12. [12]

    In support of its application for costs, the first defendant filed and served the affidavit of David Dadic sworn on 16 April 2019. That affidavit contained several annexures which included, inter alia:

    1. (1)

       email correspondence from Mr Dadic to the plaintiff and the then counsel for the plaintiff, Ms M Castle;

    2. (2)

       various correspondence sent to the plaintiff, the third defendant and the fourth defendant;

    3. (3)

       ASIC company searches; and

    4. (4)

       the submitting appearances filed by the second, third and fourth defendants on 16 August 2017.

13. [13]

    In support of orders sought with respect to costs of the appeal, the first defendant advanced the following submissions:

14. [14]

    In support of the order sought with respect to costs of the cross appeal, the first defendant submitted:

15. [15]

    The first defendant also advanced submissions, with respect to costs, in light of the submitting appearances filed by third and fourth defendants on 16 August 2017. Prior to turning to those submissions, the relevant authority is set out below.

16. [16]

    Rule 6.11 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) provides:

17. [17]

    Where a party files a submitting appearance they cannot contest the plaintiff’s claim, or take any other step in the proceedings. This includes foregoing entitlement to either prior notice of, or subsequent objection to, final orders: Fitter v Public Trustee [2007] NSWSC 1487 at [20]; Trust Company of Australia Ltd v Perpetual Trustees (WA) Ltd (No 2) (1995) 36 NSWLR 654 at 659-660.

18. [18]

    Rule 6.11 of the UCPR deals with the costs consequences of the filing of a submitting appearance. It provides, if the requisite words are used, that the submitting party does not submit to a costs order. Nevertheless a submitting party will not ordinarily be liable for costs incurred after filing their submitting appearance: China Shipping (Aust) Agency Co Pty Ltd v D V Kelly Pty Ltd (No 2) [2010] NSWSC 1557 at [8]. In that case, Rein J referred to Develtor Property Group Pty Ltd v Newcastle City Council [2001] NSWLEC 47 where Bignold J (at [42]) extracted the following proposition from decided cases:

19. [19]

    Rule 10.1(1) of the UCPR concerns the proper service of filed documents:

20. [20]

    In light of that authority, the first defendant advanced the following submissions:

21. [21]

    The first defendant also placed emphasis upon the role of the third and fourth defendants, namely, that they caused the cross appeal. Those submissions are extracted below:

22. [22]

    Finally, the first defendant also sought an order that the plaintiff, third and fourth defendants pay the costs of the first defendant’s application for costs, as the first defendant earlier provided those parties with an opportunity to consent to the costs order presently proposed and they declined.

General Principles

1. [23]

   As to the principles applicable in that respect I refer to my judgment in Moseley v AB (No 2) [2017] NSWSC 1812 at [65]-[79], extracted below:

Consideration

1. [24]

   The first defendant has been successful in respect of both the appeal and the cross appeal and costs orders should be made in its favour, consistent with UCPR r 42.1 and the exercise of the discretion conferred on the Court by s 98 of the Civil Procedure Act 2005 (NSW).

2. [25]

   The written submissions filed on behalf of the first defendant forcefully establish that it should have costs not only against the plaintiff but the third and fourth defendants with respect to the cross appeal on an ordinary basis. Upon closer examination the submitting appearances by the third and fourth defendants were filed with respect to the further amended summons and not with respect to the cross appeal and contrary to UCPR r 10.1(1) the submitting appearances were not served on the first defendant, such that no objection was taken in the hearing of the appeal to submissions made by counsel in opposition to the relief sought in the cross appeal. I accept the submission that in substance submissions were made by the third and fourth defendants inconsistent with the submitting appearance but consistent with their opposition in the Local Court. Overall the true position as explained in Kisimul Holdings Pty Ltd v Clear Position Pty Ltd (No 2) [2014] NSWCA 317is that, in the circumstances of the case, a relevant submitting appearance was not made with respect to the cross appeal and in substance there was an opposition to that relief.

3. [26]

   In those circumstances, the first defendant should have costs on an ordinary basis of the appeal as against the plaintiff, the cross appeal against the plaintiff and the third and fourth defendants (collectively, “the cross defendants”), and the cross defendants with respect to the present application for costs.

Orders

1. [27]

   The Court makes the following orders:

   1. (1)

      The plaintiff to pay the first defendant's costs of the appeal on the ordinary basis. There otherwise be no order as to costs of the appeal.

   2. (2)

      The first, second and third cross defendants to pay the cross claimant's costs of the cross appeal on the ordinary basis.

   3. (3)

      The plaintiff / first cross defendant and the second and third cross defendants to pay the first defendant / cross claimant's costs of this application for costs.