APPLICATIONS ARE EXPENSIVE: NINE POINTS FROM AUSTRALIA TO REDUCE COSTS

Given the recent increase in court fees  in relation to applications it is prudent for everyone involved to look for a means to avoid the need for applications, or reduce their client’s exposure to costs.  Similar problems are faced throughout the world, it seems. It is worthwhile looking at a case highlighted by the Australian Professional Liability Blog, Tugrul v Tarrants Financial Consultants Pty Limited [No 5] [2014] NSWSC 437 a decision by Kunk J.  These nine principles could easily be adapted for use in courts in which the Civil Procedure Rules apply.

“…once a motion is filed, the parties are obliged to ensure that only the real or essential issues are litigated. This calls for discrimination in both the preparation of evidence and argument. As to the former, real thought must be given to the precise evidence required. The practice of exhibiting “everything” or “the file” to provide an evidentiary cornucopia from which only a few morsels are ultimately selected to be referred to in argument is completely unacceptable.”

THE 9 KEY POINTS: A SUMMARY (AND A SLIGHT ADAPTATION)

• The Overriding Objectives are not just pious exhortations. They have real consequences and should be applied rigorously in all litigation great or small.
• Civility, including civility in correspondence, and trust and respect between the professionals involved is important.
• Many interlocutory applications may be able to be dealt with by way of a telephone call.
• A request for information must be reasonable and focused. A justification for the request must be given.
• Those responding to a request must do so intelligently and with the overriding objective in mind.
• The making of an application should be regarded as a last resort.
• No application should be made without the respondent being given a final, written, notice of the relief to be sought, the reason for it and a reasonable opportunity to respond.
• Once an application is made only the essential issues should be litigated. Real thought must be given to the precise evidence required. Where an application or argument is unsustainable this should be recognised and abandoned, with notice given, as early as possible.
• If unnecessary expense or delay is caused by a failure to comply with the overriding objective the court may respond by penalising the lawyers involved.

THE BACKGROUND TO THE JUDGMENT

In essence the courts in Victoria have  introduced a Civil Procedure Act which is, in many respects, akin to the Jackson reforms. Particularly the need to act with proportionality and an overriding objective.

SECTION 56 & 69 OF THE CIVIL PROCEDURE ACT 2010 (THESE MAY SEEM FAMILIAR)

65. Section 56 of the CP Act provides:

“(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.

(3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court.

(4) Each of the following persons must not, by their conduct, cause a party to civil proceedings to be put in breach of a duty identified in subsection (3):

(a) any solicitor or barrister representing the party in the proceedings,

(b) any person with a relevant interest in the proceedings commenced by the party.

(5) The court may take into account any failure to comply with subsection (3) or (4) in exercising a discretion with respect to costs.

(6) For the purposes of this section, a person has a “relevant interest” in civil proceedings if the person:

(a) provides financial assistance or other assistance to any party to the proceedings, and

(b) exercises any direct or indirect control, or any influence, over the conduct of the proceedings or the conduct of a party in respect of the proceedings.

66. Also relevant is s 59 of the CP Act, which applies with equal force to the parties and the Court:

“In any proceedings, the practice and procedure of the court should be implemented with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination beyond that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute between the parties and the preparation of the case for trial.”

THE JUDGMENT: 9 KEY POINTS IN MAKING APPLICATIONS

68. “How do these dicta and the requirements of ss 56 and 59 of the CP Act translate into practice when interlocutory issues arise, including such matters as amendments, strike outs, discovery and security for costs? Assuming compliance by the practitioner with the relevant professional conduct rules, nine points may be made by way of general, practical guidance. Nevertheless, the variety of circumstances confronted in practice means that what follows cannot be exhaustive.

69. First, it must be emphasised that s 56 of the CP Act and its related provisions are not just pious exhortations to be acknowledged and then ignored. They have real consequences for the clients and lawyers in this Court and are to be applied rigorously in the conduct of all litigation, great or small.

70. Second, solicitors and barristers are members of a profession. It is of the essence of a profession that relations between its members are characterised by civility, trust and mutual respect. The Court sees far too much correspondence between lawyers that bears none of those qualities. They must never be abandoned at the behest of clients or in the misguided belief that that is what successful representation of a client requires.

71. Third, many interlocutory issues can be solved or at least better understood by a simple telephone call. It has been suggested that some lawyers no longer speak to their opponents on the telephone for fear of being “verballed” in an affidavit. If that is true, then it is a retrograde development which the CP Act gives legislative authority to the profession to reverse.

72. Fourth, if one party requires information or an explanation from another, then the request should be reasonable and focused. A clear justification for the request should be given.

73. Fifth, faced with a reasonable request, the recipient should not automatically respond with an unthinking denial of legal entitlement to the information. The obligation to facilitate the overriding purpose will sometimes require information or an explanation to be given to which the party may not be “legally” entitled. Furthermore, if it is information which would be required to be produced in response to a subpoena or notice to produce then it is contrary to the s 56 obligations of a party and that party’s lawyers to resist providing it unless and until the Court’s process is invoked. If there is concern for the confidence of such material then an undertaking of the kind considered in Hearne v Street [2008] HCA 36;(2008) 235 CLR 125 (which would apply if the information were provided under compulsion) should be sought and given.

74. Sixth, the filing of a motion should be regarded as a last resort. It will inevitably add to costs, and delay the progress of the matter to hearing.

75. Seventh, no motion should be filed without the putative respondent being given final, written notice of the relief to be sought, the reason for it and a reasonable opportunity to respond. The Court sees far too many examples of deadlines of a day or less being set in correspondence. My own view, as a rule of thumb, is that three clear business days is reasonable to allow for a response on any matter of substance. If the recipient requires more time to obtain instructions, then they should send a prompt request with an explanation to that effect and an indication of when a proper reply will be provided. In relation to challenges to pleadings it was once the practice for opposing counsel to confer before a strike out motion was filed. To the extent that practice has been lost, it should resurrected.

76. Eighth, once a motion is filed, the parties are obliged to ensure that only the real or essential issues are litigated. This calls for discrimination in both the preparation of evidence and argument. As to the former, real thought must be given to the precise evidence required. The practice of exhibiting “everything” or “the file” to provide an evidentiary cornucopia from which only a few morsels are ultimately selected to be referred to in argument is completely unacceptable. Where it becomes apparent that an application or argument is unsustainable, it should be abandoned, and that abandonment notified to the other parties, at the earliest opportunity.

77. Ninth, where delay or unnecessary expense has been caused by conduct which is contrary to the obligations of parties and their lawyers under s 56 and its related provisions, parties and lawyers should not be in any doubt that in appropriate cases the Court will exercise its power in relation to costs (see s 56(5) of the CP Act) to provide some measure of justice in response to such conduct.