Deighton v Dewit

HIS HONOUR: By his statement of claim filed on 21 October 2020, the plaintiff claims damages from the defendant as the result of sexual assaults upon him allegedly committed by the defendant at various locations between 1987 and 1989. The plaintiff was between the ages of 14 and 16 years old at that time. The defendant was then an adult.

Despite the fact that the proceedings were commenced nearly two years ago, nothing much has happened to progress the proceedings in any meaningful sense. No defence to the statement of claim has yet been filed. Threats by the plaintiff to join the State of New South Wales as a second defendant, the entity said to be in charge of the Fort Scratchley Museum in Newcastle where the plaintiff and the defendant first met, have ebbed and flowed with no apparent finality until today when counsel for the plaintiff finally warmed to my invitation to file in court a draft amended statement of claim naming the State as a second defendant that has been lurking in the shadows of correspondence between the parties for some time. It is alleged that the plaintiff sustained injuries as the result of sexual and physical abuse at various institutions for which the State was responsible, including the Reiby Juvenile Justice Centre, the Worimi Shelter and the Mt Penang Detention Centre between 1987 and October 1992 at the hands of people employed there.

On 21 October 2020, the plaintiff filed a notice of motion seeking an order that the defendant’s assets be frozen pending resolution of the proceedings pursuant to UCPR 25.11. That application came before Wright J on 11 December that year. In circumstances that do not presently require elaboration, his Honour dismissed the application and ordered the plaintiff forthwith to pay the defendant’s costs. His Honour later made a gross sum costs order in the amount of $10,000 in respect of those costs in favour of the defendant following an application that was heard on 13 July 2021. That costs order remains unsatisfied.

On 12 November 2021, the plaintiff was directed to serve any proposed amended statement of claim on the defendant by 26 November 2021 with the defendant directed to indicate by 10 December 2021 whether he consented to the filing of that document. No proposed amended statement of claim was served upon the defendant in accordance with the direction. Notwithstanding that fact, the solicitor for the defendant wrote to the plaintiff’s solicitor on 7 December 2021 indicating that he “does not consent to the plaintiff filing the proposed amended statement of claim.” Despite an immediate request from the plaintiff’s solicitor for the defendant’s reasons for then withholding consent to the filing of the amended statement of claim, she received no response.

Accordingly, on 21 January 2022, the plaintiff served the defendant with a notice of change of solicitor and a notice of motion dated 23 January 2022 seeking leave to file the proposed amended statement of claim. That document did not include any amendments seeking to join the State as a second defendant. The defendant had previously indicated by letter dated 7 December 2021 that he opposed the application. It was heard by Registrar Jones and dismissed on 5 April 2022, the plaintiff having informed the Court that he abandoned the proposed amendments. In the somewhat curious events that have now occurred, the plaintiff filed the identical amended statement of claim in court before me with the defendant’s consent.

Shortly thereafter, on 21 April 2022, the defendant filed the present application seeking the following relief:

In support of the application, the defendant relied upon a series of affidavits affirmed by his solicitor Gavin John Hanrahan. Paragraphs 35 and 36 of Mr Hanrahan’s 23 May 2022 affidavit are as follows:

The defendant correctly observed that it is almost the second anniversary of the filing of the original statement of claim, which on the defendant’s submission failed to plead a case against him in a proper form. But for the belated filing of the amended statement of claim today, that would have continued to be the position. However, I consider that it is incorrect to say, as the defendant has also submitted, that the original statement of claim has been “abandoned by serving the first and second amended versions”. Until today, those versions, although circulated, were never filed and until today the defendant opposed them. The plaintiff could not on my understanding be taken to have abandoned the original statement of claim until such time as a later pleading superseded it. The amended statement of claim filed today by consent did just that. Be that as it may, the defendant prays in aid the plaintiff’s indecision and procrastination over two years concerning the final constitution of the proceedings as evidence of conduct by his solicitors that would warrant, or support, the making of the orders that he seeks.

In seeking to secure personal costs orders against the plaintiff’s legal representatives, the defendant must establish that the conduct of the lawyers concerned satisfies the test identified in Rahman v Al-Maharmeh (No 2) [2021] NSWCA 151 at [22] per Brereton JA as follows:

In Lemoto v Able Technical Pty Ltd & 2 Ors (2005) 63 NSWLR 300; [2005] NSWCA 153, McColl JA said this at [192]-[195]:

In Muriniti v Kalil [2022] NSWCA 109, Brereton JA also said this at [8]:

Mr Baran of counsel for the defendant accepts that he must satisfy the three stage test identified by Brereton JA in Rahman v Al-Maharmeh and that wasted costs orders should only be made in circumstances where the jurisdiction to do so is exercised with care and only in clear cases: Lemoto at [92]. Even though Mr Baran also uncontroversially acknowledged that orders of the kind he seeks are usually made at the conclusion of a trial, he also emphasises that that is only a general rule and the unique circumstances of a particular case may require that a party be compensated for all of the costs that he or she has had to pay that are directly caused by the unreasonable behaviour or incompetence of the opposing party’s lawyers. Mr Baran submits that this is such a case. It should also be observed that I must take into account the public interest reflected in the legislative provisions that litigants should not be financially prejudiced by the unjustifiable conduct of litigation by their lawyers or their opponent’s lawyers.

Sections 98 and 99 of the Civil Procedure Act 2005 are in these relevant terms:

In this case, the defendant relied specifically upon the following matters that he contends arise from the conduct of the plaintiff’s solicitors:

I pause to observe that Mr Barter of counsel appeared for the plaintiff instructed by the solicitors whose conduct is said to be the subject of these criticisms. No attention was given in the proceedings before me on this application to the question of whether Mr Barter appeared for the plaintiff but not the solicitor or for the solicitor but not the plaintiff or for both. In the latter case, no reference was made to the potential for a conflict of interest between the plaintiff as the party ordinarily liable for any adverse costs order and the solicitors who may wish to argue that the ordinary rule should not be disturbed. Having regard to the conclusions at which I have arrived, that potential has not assumed any direct importance. Notwithstanding that, the following matters, described by Brereton JA in Muriniti v Kalil at [46] should be noted:

Although as I have indicated, the second and third points made by his Honour do not presently arise, the first one does. The defendant’s proposition is that the plaintiff’s legal representatives have been unacceptably desultory in their approach to the litigation and appear from time to time to have been stalled in a state of either chronic or intermittent indecision. The evidence reveals that the plaintiff’s lawyers have for some time been in discussions with the State and that their decision not until today to commence proceedings against it was informed by the hope that some extra judicial resolution of the proceedings was or might have been possible. The defendant’s response to that suggestion is that such a hope should not have operated to leave the proceedings in a frail condition for so long, devoid of momentum, particularly having regard to the fact that the defendant has incurred costs that might have, to some extent at least, been avoided if the matter had been progressed with considerably more alacrity.

As accurate as the defendant’s criticisms would appear to be, I am disinclined to make an order that the plaintiff pay all or some portion of the defendant’s costs incurred beyond what might have been expected in a case such as this to date, or that the burden of such costs should be borne by the plaintiff’s lawyers. First, despite the somewhat unsatisfactory nature of the way the case has been conducted so far, I am not satisfied that the conduct of the plaintiff’s solicitors could be said to have acted improperly, unreasonably, or negligently. Forensic decisions that turn out to be wrong or ill-advised or delays that could have been avoided with a little more attention to detail do not necessarily or easily attract any of these adverbs. Secondly, there is a real risk that the relationship between the plaintiff and his solicitor may be adversely affected by such an order and that the conduct of the proceedings might become stalled even further. Thirdly, but in a related sense, although I am not in a position to make any decision or determination about the plaintiff’s injuries or disabilities that are alleged to have arisen from the defendant’s impugned conduct, there is material to suggest that he is suffering from some problems that might be exacerbated should he be forced to seek alternative representation. Finally, with the recent decision to join the State now having been made, it might be expected that the proceedings will acquire a momentum that they have lacked until now. There is a risk that that momentum may be lost if the plaintiff’s solicitors are foist with yet another matter to contemplate, strictly unrelated to the progress of the litigation.

In my opinion, quite apart from the fundamental difficulty that the plaintiff’s solicitors have not have acted improperly, unreasonably, or negligently, this is a case in which it is overwhelmingly preferable to postpone any orders for costs relating to the proceedings thus far until they are finally concluded or resolved. I note that neither the plaintiff nor the defendant is a man of means. The outstanding costs order favouring the defendant remains unsatisfied and there would appear to be no prospect that the plaintiff could personally satisfy a further order. It goes without saying that casting the burden of such an order upon his solicitors would undoubtedly see them out of the case while simultaneously causing unintended collateral damage to the plaintiff himself.

In my view, the defendant’s notice of motion should be dismissed. However, in the circumstances, I consider that the costs of the motion should be the defendant’s costs in the proceedings.