Abstract

Article

Multiple Representation for Single Party

 

If a party seeks to be represented in an action by more than one set of solititors and counsel, the sanction of the Court is necessary, but it has the power to give it under the Rules of Court (Tindle v Ansett Transport Industries (Operations) Pty Ltd (1990) 21 NSWLR 492 at 498.) as well as under its inherent powers. Australia Pacific LNG Pty Limited & Ors v Sooner Insurance Company & Ors [2021] QSC 43.

It is a general rule of practice (MDA National Limited v Medical Defence Australia Ltd [2014] FCA 954 at [55]; Ghose v CX Reinsurance Company Ltd [2010] NSWSC 110 at [33]; Cart Provider Pty Ltd v Park [2016] QSC 277 at [18].) that each party to proceedings is entitled only to be represented by one firm of solicitors on the record, (Elphick v Westfield Shopping Centre Management Co Pty Ltd [2011] NSWCA 356 at [3], [5] and [9]; Konneh v State of New South Wales (No 2) [2013] NSWSC 390 at [79]. Rules 140 and 17(1)(b) UCPR.) and counsel instructed by that firm. (Buses + 4WD Hire Pty Ltd v Oz Snow Adventures Pty Ltd [2016] NSWSC 1017 at [28].)

Leave is granted rarely, or exceptionally, and only when the interests of justice require it. Lewis v Daily Telegraph Ltd (No. 2) [1964] 2 QB 601 at 623; Hinchcliffe v Carroll [1969] VicRp 18; [1969] VR 164 at 166; Elphick v Westfield Shopping Centre Management Co Pty Ltd (supra)at [10]; Cart Provider Pty Ltd v Park (supra) at [24]; Buses + 4WD Hire Pty Ltd v Oz Snow Adventures Pty Ltd (supra) at [28]; Spotlight Pty Ltd v Maintek Roofing Pty Ltd [2017] NSWSC 165 at [28]. Rule 367(2) UCPR.

The purpose is fairness to the opposing parties. Buses + 4WD Hire Pty Ltd v Oz Snow Adventures Pty Ltd (supra) at [28]. Rule 5(2) UCPR. There is the potential for inconsistent propositions to be put, resulting in confusion, increased cost and prejudice to the administration of justice and so, it is warranted only with caution and in the interests of justice, for example, when a party has separate interests which cannot be reconciled,^[( AMP Capital Investors Ltd v Parsons Brinckerhoff Australia Pty Ltd [2013] NSWSC 1633 at [19].),  or by the presence of a conflict of interest, such as between an insurer and an insured. Buses + 4WD Hire Pty Ltd v Oz Snow Adventures Pty Ltd (supra) at [33] and Spotlight Pty Ltd v Maintek Roofing Pty Ltd (supra); Wilkins v Kingsley-Strack (BC9606018, unreported, Giles CJ Comm D, 12 December 1996). Cost and delay are also relevant considerations.

The general underlying tests are the prejudice to the defendant if the order is not made, and the prejudice to the plaintiffs if it is, Buses + 4WD Hire Pty Ltd v Oz Snow Adventures Pty Ltd [2016] NSWSC 1017 at [51]; Stewart v Nestle Australia Limited [2018] NSWSC 870 at [22]. but the applicant bears the onus of showing why it is in the interests of justice to make such an exceptional order. Elphick v Westfield Shopping Centre Management Co Pty Ltd (supra).

Usually, a party is allowed to have two solicitors on the record only when they jointly engage one set of counsel and nominate one address for service. For example, Johnson Tiles Pty Ltd v Esso Australia Ltd (1999) ATPR 41-679; [1999] FCA 56 at [70] and [71]; Parbery & Anor v QNI Metals Pty Ltd & Ors [2018] QSC 83. A refusal  of an order will usually not prevent the applicant from engaging such lawyers as it wishes to assist it. Canberra Residential Developments Pty Ltd v Brendas [2010] FCAFC 125 at [45]; Parbery & Anor v QNI Metals Pty Ltd & Ors [2018] QSC 83. It is not enough that it simply wishes to maintain separate legal representation arrangements that had been in place in order to avoid some relatively small wasted time and costs and that the litigation will be more efficiently managed with dual representation.

In Parbery, those who were granted leave to have separate representation were the party company’s general purpose liquidators and its special purpose liquidators; who both bcame the solicitors on the record for it with a common address for service. The claim was very large, and separate solicitors acting for the sets of liquidators had already had extensive involvement in the proceedings, and the same group of counsel was to be instructed jointly by the sets of solicitors, which could ensure that no prejudice would be experienced by the defendants.

Order for Party’s Lawyer to pay Costs

On an issue whether an unsuccessful party’s lawyers should be ordered to pay the costs of  preliminary interlocutary proceeding which had been commenced without even the minimum evidence necessary from the party to justify her being a party to it, and with no apparent reason why she was a party, and the proceeding may have been commenced on her behalf without any proper consideration of her prospects of success, the Court’s order for the firm to show cause why it should not be liable in respect of part or all of the prty’s costs does not presume or imply a presumption that it was so liable, or reverse the onus of proof. It remains upon the party seeking the order. Registrar v Unnamed Respondent [1994] ACTSC 24; (1994) 234 FLR 248 at [9]; Goritsas v Barakat [2012] NSWSC 36 at [42]. Courts sometimes define issues in that way when there is no party who may do so on an adversarial basis. Dyczynski v Gibson [2020] FCAFC 120; (2020) 381 ALR 1.

Whether directors of corporate parties, who were not themselves parties, should be personally liable for costs depends on other matters such as whether the corporate party was able to meet its costs liabilities. FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340 at [210] adopted by Gilmour J in WA Property Holdings Pty Ltd v Hampton Transport Services [2017] FCA 1310 at [10]. It is therefore distinguishable because this issue concerns potential costs liability of solicitors who commenced legal proceedings on behalf of parties, involving the potential exercise of the discretion conferred on the court to order a party's lawyer to bear costs personally, a discretion which can be exercised on the court's own motion.

Principles in the exercise of the discretion may be summarised as follows:

1. 1. Instituting or maintaining a proceeding on behalf of a client which has no, or substantially no, prospect of success will not, without more, invoke the jurisdiction to make a costs order against a lawyer. Something which involves unreasonable conduct is required.
2. That will depend on the circumstances of the case.
3. The element of acting unreasonably involves some deliberate or conscious decision taken by reference to circumstances unrelated to the prospects of success, with either a recognition that there is no chance of success, or an intention to use the proceeding for an ulterior purpose, or to abuse the processes of the court, or with a disregard of any proper consideration of the prospects of success.
4. There must have been a serious dereliction of duty owed to the court, or serious misconduct against promoting the course of and the proper administration of justice.
5. An ulterior purpose or an abuse of process cannot be assumed simply because the case is hopeless, for a party is entitled to have a practitioner act for him or her in an unmeritorious case, and the risks of a practice whereby lawyers endeavour to pressure their opponents into abandoning clients or particular issues or arguments for fear of personal costs orders being made against them should be avoided. The court should be careful not to stultify the enforcement of rights by being too ready to expose solicitors acting for parties to liability for costs.
6. The power to order costs against a lawyer must be exercised with care and discretion and only in clear cases. The court needs to be positively satisfied of facts which justify the exercise of the power. It is not a matter of onus of proof, but where the court is considering the exercise of the power of its own motion, the lawyer is under no onus to disprove the necessary facts.

Mitry Lawyers v Barnden [2014] FCA 918 at [42]. See, also, Young v Hughes Trueman Pty Ltd (No 4) [2017] FCA 456 at [27]; Barkhazen v Conair Australia Pty Ltd (No 2) [2018] FCA 992 at [16]‑[17]; Davidson v Suncorp-Metway Limited (No 5) [2021] FCA 256.

It might be observed that although the client’s absence from the hearing and prior termination of the lawyer’s engagement may reduce the evidence before the Court on this issue, the client may retain any right against the lawyer in negligence for any liability for costs awarded against the client as a result of the finding.

A lawyer will not be liable for costs awarded against the client which have been incurred after the engagement had been terminated.

Grounds of Application to be Verified

When commencing an application for which the Rules under which it is brought require a prospective applicant to establish, among other things, a reasonable belief that of a possible right to obtain relief from the respondent and, if the application is for preliminary discovery, that the respondent had or was likely to have documents relevant to a claim, the applicant’s solicitor should file an affidavit by the client meeting those requirements and stating the facts relied on. Its absence may support an inference that no thought was given to the client’s position when the proceeding was commenced in his or her name. Davidson v Suncorp-Metway Limited (No 5) [2021] FCA 256.

Indemnity Costs

A Calderbank offer will not justify an award of indemnity costs unless its rejection was unreasonable in all the relevant facts and circumstances: Ford Motor Co of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1 at [16]‑[17]. Two matters which are often relevant are the time allowed to the offeree to consider the offer, and the extent of the compromise offered: Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 at [25].

An invitation to withdraw the proceeding, coupled with a threat to seek security for costs, and a further threat of a claim for indemnity costs is not necessarily an explicit offer of compromise, even with an unclear prospect that the offeror would waive the costs it would otherwise be entitled to under the Rules if the matter were discontinued. A lack of clarity may support a conclusion that it was not unreasonable to decline the offer: BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd (No 4) [2009] FCA 1448; (2009) 263 ALR 63 at [13]. It may be unreasonable if the proceeding was hopeless and properly advised, the party should have known that it had no prospects of success.

The principles to be applied when costs are sought on an indemnity basis are as follows. A court has a wide discretion, to be exercised judicially, as to costs. An order for indemnity costs depends upon the particular facts, without hard and fast rules. But an indemnity costs order is a departure from the usual, reflecting the court's disapproval, but only where the unsuccessful party has been involved in some unreasonable conduct in relation to the proceedings, such as the institution or continuation of a proceeding that was plainly unreasonable or for an ulterior or collateral purpose. If a party brings a hopeless case it can be inferred that it was commenced or continued for some ulterior motive or because of some wilful disregard of the known facts or the clearly established law: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397. But such an inference is not necessary: it is sufficient that the court's resources and the successful party's costs have been wasted on frivolous litigation. Civil Properties Pty Ltd v Miluc Pty Ltd [2011] WASCA 195

The court should approach consideration of the separation of reasonableness as to particular issues in the impressionistic way as with claims to the costs of certain issues in an overall claim: see e.g. Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388 at [52]; Davidson v Suncorp-Metway Limited (No 5) [2021] FCA 256.

Joint Party's Liability for Costs

In general but not an invariably, where a court orders that costs be paid by two or more parties, their liability is joint and several, for the successful litigant should not lose out if one of the unsuccessful parties cannot meet its share of the costs burden: Bitzer Australia Pty Ltd v Japp [2014] FCA 1040 at [45], citing GE Dal Pont, Law of Costs (2nd ed, LexisNexis Butterworths, 2009) at [11.2]. But although the court’s discretion must be exercised judicially it is unconfined and broad, and depends on the facts of each case: Probiotec Ltd v The University of Melbourne [2008] FCAFC 5; (2008) 166 FCR 30 at [46]‑[48]. There is no absolute rule that, in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party with respect to the exercise of the discretionary power: [Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72] at 88; nor that the sole purpose of a costs order is to compensate one party at the expense of another: Ibid at 89 [43]. These broad principles are not limited to unsuccessful respondents, and circumstances may indicate that a party should be liable for only a small proportion of the overall costs. It may be relevant that the party had generally been inactive but should be liable along with the others because, though he lacked substantial involvement in the relevant events, he claimed final orders, and provided affidavits in support of his own claim and those of others. Jack Brabham Engines Ltd v Beare [2010] FCA 1096. The ultimate question is whether in all the circumstances it is just to make the order. Davidson v Suncorp-Metway Limited (No 5) [2021] FCA 256.