The Owners - Strata Plan No. 94784 v Mirvac Projects Pty Ltd (No 3)

The background to this matter is set out in my judgments of 14 June 2024 [1] and 21 June 2024. [2]

On 21 June 2024 I granted the plaintiff leave to rely on the expert reports served late in the face of the 16 November 2023 guillotine order and ordered that the plaintiff pay the defendants’ costs of the plaintiff’s motion seeking leave to rely on those reports.

I also directed that the solicitor on the record for the plaintiff, Mr Daniel Russell, show cause why he should not personally meet that costs order and why he should not be directed not to make any charge to the plaintiff in relation to the costs incurred by the plaintiff in relation to the motion seeking leave.

I have now received a further affidavit from Mr Russell made on 26 July 2024 which supplements the evidence he gave in his affidavit of 19 June 2024 and the submissions he made in his document called “Plaintiff’s Further Submissions” of 21 June 2024. [3]

I have also received submissions made on behalf of Mr Russell by Mr Corsaro SC.

One important matter that emerged from Mr Russell’s 19 June 2024 affidavit is that although each of the four experts in question – Mr Girling, Mr Keato, Mr Ingegneri and Mr Dockrill – were sent letters of retainer only days before the date specified in the 16 November 2023 guillotine order, that is 1 March 2024, they had initially been retained on behalf of the plaintiff much earlier.

In his affidavit of 19 June 2024, Mr Russell gave this evidence about the February 2024 retainer letters:

Those matters were not apparent to me from the evidence adduced on behalf of the plaintiff in support of its motion seeking leave to rely on the further expert evidence, being two affidavits made by Mr Michael Li, the solicitor with the day to day carriage of the matter for the plaintiff.

That led me to make the comments in my 14 June 2024 judgment as follows: [4]

Had Mr Li given the explanation for the delay in the further retainer by the plaintiff of its experts in late February 2024 that now appears in Mr Russell’s two affidavits, I would have qualified what I said in the last two of those paragraphs.

In that regard, Mr Corsaro on behalf of Mr Russell submitted that:

In his affidavits of 19 June and 26 July 2024, Mr Russell has now given a comprehensive explanation of the circumstances that led to the delayed service of the four expert reports.

To some extent, that explanation is different than that offered by Mr Li on 14 June 2024.

Thus, in his 19 June 2024 affidavit, Mr Russell deposed:

That evidence may be contrasted with that given by Mr Li as I set out at [11] of my 14 June 2024 judgment.

Further, Mr Russell, in his 26 July 2024 affidavit, withdrew a number of the submissions he made in the “Plaintiff’s Further Submissions” document of 21 June 2024, to which I have referred. I accept that Mr Russell had a very short time to prepare the latter document.

Looking at the matter more widely, I am satisfied from the further evidence of Mr Russell that, to a large extent, the cause of the delay in the service by the plaintiff of its expert evidence was an underestimation by the experts of the time that they would need to complete their work. Mr Russell’s evidence shows that he and his firm’s staff spent considerable time in December 2023 and in January and February 2024 dealing with the experts.

I see substance in Mr Russell’s opinion that:

In his affidavit, Mr Russell gave detailed evidence in relation to the three experts to support that conclusion.

The power to make a costs order against Mr Russell derives from s 99 of the Civil Procedure Act 2005 (NSW).

Section 99 applies if it appears to the Court that costs have been incurred by the serious neglect, serious incompetence or serious misconduct of a legal practitioner, or improperly, or without reasonable cause, in circumstances in which a legal practitioner is responsible.

In those circumstances, after giving the legal practitioner a reasonable opportunity to be heard, the Court may, amongst other things, disallow the whole or part of the costs of the proceedings, or order the legal practitioner, in this case a solicitor, to pay to the client the whole or any part of any costs that the client has been ordered to pay to any other person. [5]

Further, under s 56(3) of the Civil Procedure Act, a party to civil proceedings is under a duty to assist a court to further the overriding purpose of achieving the just, quick and cheap resolution of the real issues in a proceeding and, to that effect, to comply with the court’s directions. Under s 56(4) of the Civil Procedure Act, a solicitor representing a party must not cause the party to breach that duty and, by reason of s 56(5), the court may take any failure to comply with those requirements into account when exercising any discretion as to costs.

The Court of Appeal has explained in King v Muriniti [6] that, in deciding whether to make an order under s 99, the court must balance the public interest in maintaining and nurturing a legal profession that provides vigorous representation for litigants in the court on the one hand, and the public interest in the efficient administration of justice in the light of the overriding purpose of achieving the just, quick and cheap resolution of the real issues in the proceedings on the other.

My impression from Mr Russell’s evidence is that steps could have been taken by him, or by his firm’s staff, to engage more expeditiously with the experts to direct their attention to the task of completing their reports within the time specified in the guillotine order of 16 November 2023 and to have earlier ascertained that they may need further time to complete their tasks.

However, I am satisfied that the delay was not the product of any serious neglect, serious incompetence, or serious misconduct or improper conduct, or conduct without reasonable cause, on the part of Mr Russell.

I am therefore satisfied that this is not a case where any order should be made under s 99 of the Civil Procedure Act.

I also record that Mr Russell has deposed that:

In view of my conclusions, it is not necessary to consider the implications of that evidence.

Finally, Mr Russell also deposed:

In the circumstances, the only order I propose to make is that by 5pm on 2 August 2024, the solicitors for the plaintiff provide a copy of these reasons to the members of the strata committee of the plaintiff.