Bilic & Bilic v Nicholls & Ors (No 3) [2014] QDC 48

DISTRICT COURT OF QUEENSLAND CITATION: Bilic & Bilic (No 3) v Nicholls & Ors [2014] QDC 48 PARTIES: DRAGAN BILIC and VESNA BILIC (plaintiffs/ respondents) v ANDREW NICHOLLS (first defendant) and SHARYN LEE NICHOLLS (second defendant) and JIMI LEE (third defendant/applicant) and O’HARE LAW (non party) FILE NO/S: 22/11 DIVISION: Civil PROCEEDING: Costs orders ORIGINATING COURT: District Court at Beenleigh DELIVERED ON: 21 March 2014 DELIVERED AT: Beenleigh HEARING DATE: 11 February 2014 JUDGE: Dearden DCJ ORDER: 1. That O’Hare Law pay the third defendant/applicant, Jimi Lee, costs on a standard basis of and in relation to the application to set aside judgment against the third defendant. 2. That O’Hare Law pay the plaintiffs/respondents, -- 1 of 6 -- 2 Dragan and Vesna Bilic, costs on a standard basis of and in relation to the application to set aside judgment against the third defendant/applicant. CATCHWORDS: PROCEDURE – COSTS – District Court Procedure – Queensland – where previous solicitors for third defendant/applicant failed to seek leave to withdraw from record – whether previous solicitors for third defendant/applicant liable for costs for application to set aside default judgment LEGISLATION: High Court Rules O.7, r 7(1) Uniform Civil Procedure Rules 1999 (Qld) rr 681, 690, 990, 991. CASES: Bilic & Bilic (No 2) v Nicholls & Ors [2013] QDC 298. Commonwealth Bank of Australia v Davis [2004] 1 Qd R 363 534. Gitsham, Edwards and Jensen v Suncorp Metway Insurance Ltd [2002] QCA 416. Latoudis v Casey (1990) 170 CLR 534. Macteldir Pty Ltd v Dimovski [2005] FCA 1528. Plenty v Gladwin (1986) 67 ALR 26. COUNSEL: D A Hall for the third defendant/applicant M J Byrne for the plaintiffs/respondents S J Forrest for (non-party) O’Hare Law SOLICITORS: Robinson Locke Litigation Lawyers for the third defendant/applicant Pearson & Associates Solicitors for the plaintifs/respondents Barry & Nilsson Solicitors for O’Hare Law Introduction [1] In Bilic & Bilic (No 2) v Nicholls & Ors [2013] QDC 298, this court ordered that judgment against the third defendant/applicant entered at the Beenleigh District Court on 17 May 2013 be set aside. The court noted that the sequence of events which resulted in the successful application by the third defendant/applicant to set aside judgment had been “triggered by the unilateral decision of the third -- 2 of 6 -- 3 defendant’s [then] solicitors, O’Hare Law”1 having taken steps “to unilaterally withdraw from acting for the third defendant, without seeking leave of the court, and without compliance with the relevant UCPR [Uniform Civil Procedure Rules] provisions”.2 [2] The third defendant/applicant, who was successful in his application to set aside judgment, seeks the costs of that application, either from the plaintiffs/respondents or alternatively from the non-party O’Hare Law (previously solicitors for the third defendant/applicant), on the basis that that firm’s failure to adhere to the requirements of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) caused the irregularity which led to judgment in default being entered against the third defendant/applicant, and therefore the necessity to apply to have that judgment set aside. [3] The plaintiffs/respondents also seek their costs of the application by the third defendant/applicant, submitting that the conduct of O’Hare Law was “a serious dereliction of it’s duty”,3 but submitting also that the third defendant/applicant was the engineer of his own misfortune, and subsequently should be jointly liable with O’Hare Law for those costs. Costs – the law [4] UCPR r 681 titled “General rule about Costs” provides: “Costs of a proceeding, including an application in a proceeding, are in the discretion of the court but follow the event, unless the court orders otherwise.” 1 Bilic & Bilic (No 2) v Nicholls & Ors [2013] QDC 298 para [27]. 2 Bilic & Bilic (No 2) v Nicholls & Ors [2013] QDC 298 para [26]. 3 Exhibit 2 (Outline of Submissions on behalf of Plaintiffs) para 15, citing Macteldir Pty Ltd v Dimovski [2005] FCA 1528 per Allsop J at paragraphs (3)-(8). -- 3 of 6 -- 4 [5] The primary purpose of an award of costs is “to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings”.4 [6] Costs can be awarded against solicitors5 and/or non-parties6. Discussion [7] In Bilic & Bilic (No 2) v Nicholls & Ors [2013] QDC 298 at paragraph [23], this court set out the sequence of events which led to the third defendant/applicant being deprived “of his opportunity to either defend the matter personally, brief alternative solicitors or opt not to participate in the litigation”.7 [8] It is submitted on behalf of O’Hare Law that the third defendant/applicant was the author of his own misfortune. Mr Forrest, who appears on behalf of O’Hare Law, submitted that the series of emails exchanged between Joseph O’Hare, the principal of O’Hare Law, and the third defendant/applicant on 6 and 7 August 2012,8 had the effect that the third defendant/applicant was then advised of the status of the proceedings, the nature of the application by the plaintiffs and orders being sought by them, and was requested to pay an outstanding account, deposit funds into Mr O’Hare’s trust account and sign a costs agreement, but the third defendant/applicant responded that he could not afford to provide those funds. 4 Latoudis v Casey (1990) 170 CLR 534, 543 per Mason CJ. 5 UCPR r 690. 6 Gitsham, Edwards and Jensen v Suncorp Metway Insurance Ltd [2002] QCA 416 para [4] per White JA. 7 Bilic & Bilic (No 2) v Nicholls & Ors [2013] QDC 298 para [25]. 8 Affidavit of Joseph O’Hare sworn 7 February 2014 paragraph 17 and Exhibits JAO17-JAO27. -- 4 of 6 -- 5 [9] There is no reason to doubt any of that evidence from Mr O’Hare. However, what is incontrovertible, is that the document filed by O’Hare Law which purported to be a “Notice that Party acting in Person” failed to comply with the mandatory provisions of UCPR r 990, and as a consequence, O’Hare Law, by its unilateral choice not to apply for leave to withdraw from the court (as obliged to do by UCPR r 990(1)) “deprived the third defendant of his opportunity to decide whether or not to proceed in the legal proceedings.”9 [10] There are sound policy reasons for a provision such as UCPR r 990, and these current proceedings are a stark illustration of the necessity of such a provision. As the High Court held in Plenty v Gladwin (1986) 67 ALR 26, 27, in respect of High Court Rules O.7, r 7(1) (an analogue of UCPR r 990 & 991): “Its concern is with the record of the Court and with the service of documents. It comes into play when, rightly or wrongly, a solicitor has ceased to act and the party has not given notice of change of solicitor or notice of intention to act in person. The solicitor may then take steps to have his name removed from the record. The first step is by applying to the Court or a Justice for an order declaring that the solicitor has ceased to be the solicitor acting for the party in the proceeding. As we have noted the Court has a discretion whether or not to make the order, but unless there are special circumstances which render it expedient to retain the solicitor on the record the order will generally be made as a matter of course upon proof that the solicitor has in fact ceased to act for the party and that no steps have been taken to take the solicitor's name off the record.”10 [11] Given that the third defendant/applicant was successful in setting aside judgment, and given O’Hare Law’s failure to comply with UCPR r 990, it is, in my view, inevitable that the third defendant/applicant should recover his costs of the application to set aside judgment, and that those costs should be met not by the plaintiffs/respondents, but by O’Hare Law. That firm was the solicitor on the record 9 Bilic & Bilic (No 2) v Nicholls & Ors [2013] QDC 298 para [25] 10 See also Commonwealth Bank of Australia v Davis [2004] 1 Qd R 363, 364, per Wilson J. -- 5 of 6 -- 6 for the third defendant/applicant, and regardless of what steps they sought to take unilaterally, had not been granted leave by the court to be removed from the record. Ultimately O’Hare Law, not the third defendant/applicant, is responsible for the misfortune suffered by the third defendant/applicant. [12] Although the third defendant/applicant was not diligent in looking after his own interests, the course of events which resulted in his successful application to set aside judgment in default against him arose directly from the failure of O’Hare Law to comply with UCPR r. 990. In turn, the plaintiffs/respondents were put to expense in the proceedings to set aside judgment, an expense which is in my view directly attributable to the actions O’Hare Law vis-a-vis the third defendant/applicant. Consequently, I consider then that O’Hare Law should be held responsible for the plaintiffs/respondents’ costs, as well as the third defendant/applicant’s costs. Order [13] Accordingly, I order as follows: 1. That O’Hare Law pay the third defendant/applicant, Jimi Lee, costs on a standard basis of and in relation to the application to set aside judgment against the third defendant/applicant. 2. That O’Hare Law pay the plaintiffs/respondents, Dragan and Vesna Bilic, costs on a standard basis of and in relation to the application to set aside judgment against the third defendant/applicant. -- 6 of 6 --