A.C.N. 640 543 979 Pty Ltd atf the YBL 2020 Trust trading as Yates Beaggi Lawyers v Wang

[2025] NSWSC 189

Supreme Court

New South Wales

Medium Neutral Citation:

A.C.N. 640 543 979 Pty Ltd atf The YBL 2020 Trust trading as Yates Beaggi Lawyers v Wang [2025] NSWSC 189

Hearing dates:

10 March 2025

Date of orders:

10 March 2025

Decision date:

10 March 2025

Jurisdiction:

Common Law

Before:

Griffiths AJ

Decision:

(1) The summons filed 29 August 2024 is dismissed.

(2) The notice of motion filed 7 November 2024 is dismissed.

(3) There be no order as to costs.

Catchwords:

COSTS — Costs assessment — Review decision of Manager Costs Assessment and extend time — Where further prosecution of proceedings lacked utility — Orders made without merits hearing

Legislation Cited:

Legal Profession Uniform Law Application Act 2014 (NSW) ss 70, 71, 198

Uniform Civil Procedure Rules 2005 (NSW) r 36.10

Cases Cited:

Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681; [2018] NSWCA 84

Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6

The South East Queensland Electricity Board v Australian Telecommunications Commission (Federal Court of Australia, 10 February 1989, unrep)

Texts Cited:

Nil

Category:

Principal judgment

Parties:

A.C.N. 640 543 979 Pty Ltd atf The YBL 2020 Trust trading as Yates Beaggi Lawyers (Plaintiff)
Dixuan Wang (First Defendant)
Kanhui Wang (Second Defendant)

Representation:

Counsel:

Solicitors:
Yates Beaggi Lawyers (Plaintiff)
JC Legal Practice (First and Second Defendants)

File Number(s):

2024/00319736

Publication restriction:

Nil

ex tempore JUDGMENT (revised)

1. These proceedings relate to a dispute between the defendants and their former solicitors (A.C.N. 640 543 979 Pty Ltd atf The YBL 2020 Trust trading as Yates Beaggi Lawyers) (YBL) concerning legal fees. The second defendant, Ms Kanhui Wang, is the mother of the first defendant, Mr Dixuan Wang (who is also known as Jason Wang).

2. Two matters are said to require determination. The first is raised by a summons filed by YBL on 29 August 2024 seeking a review of a decision dated 13 August 2024 by the Manager Costs Assessment (Manager). By that decision, the Manager determined to grant an extension of time of approximately 11 months to permit the defendants to lodge a costs assessment application under s 198(3) of the Legal Profession Uniform Law Application Act 2014 (NSW) (Act).

3. The second matter requiring determination relates to a notice of motion filed by YBL on 7 November 2024. YBL seeks an order for security for costs against the first and second defendants, as well as costs on a gross lump sum basis in respect to various matters, including the costs of the proceedings involving review of the Manager’s decision, the costs of the motion and the costs of the application for a costs assessment.

4. There is a very real question as to whether there is any utility in the Court proceeding to determine any of these matters, in circumstances where it became apparent, shortly before the hearing, that the costs assessment the subject of the proceedings had in fact already been completed, as stated in a letter dated 19 February 2025 by the costs assessor. This letter was admitted into evidence over objection from Mr Amirbeaggi. I consider that the letter is directly relevant to the matters that are put before the Court today. The Court only became aware of that correspondence when the voluminous court books were belatedly delivered on 6 March 2025 at approximately 2pm.

5. When the issue of utility was raised with the parties at the outset of the proceedings this morning, Mr Amirbeaggi, who appeared for the plaintiff, urged the Court to proceed with the hearing and determination of both the summons and notice of motion despite the recent development to which I have referred.

6. Mr Luo, who appeared for the first and second defendants, appeared to accede to the Court's observations that, in the events that had occurred, “the horse had bolted” because, although I am informed that the parties have not been served with a copy of the costs certificates issued by Mr Wall on or around 23 October 2024, it was nevertheless the case that it was not disputed that a formal determination of costs has been made as indicated in Mr Wall's letter.

7. I see no utility in determining the matters raised by the summons and the notice of motion. They have been overtaken by the costs assessor's determination of the defendants’ application for a costs assessment, which was assigned to the costs assessor, Mr Christopher Phillip Wall, on 14 August 2024.

8. It is appropriate that I say something more about the events which led up to Mr Wall's determination of the costs assessment on 23 October 2024.

9. The evidence indicates that the parties were advised by the Manager on 14 August 2024 that the application for assessment had been assigned to Mr Wall. The following day, 15 August 2024, Mr Wall wrote to the parties. He set out his tentative or preliminary observations concerning the application, having regard to the material which was then before him, including the defendants’ detailed list of objections to the tax invoice. Mr Wall asked YBL to provide specified material by 29 August 2024 and for the defendants to do so by 12 September 2024.

10. On 16 August 2024, Mr Wall advised the parties by letter that, despite YBL's stated intention to seek a review of the Manager’s decision, Mr Wall’s statutory duty required him to proceed with the costs assessment unless there is a stay.

11. By email dated 11 September 2024, YBL informed the defendants and Mr Wall that the summons seeking review of the Manager’s decision was listed for directions on 2 October 2024 and that the summons included a prayer for a stay of the Manager's decision.

12. On 12 September 2024, Mr Wall wrote to the parties and noted that YBL had failed to provide the information previously sought by the stipulated date of 29 August 2024. After noting YBL’s email dated 11 September 2024, Mr Wall reiterated that it was his statutory duty to assess costs unless there was a stay. He also noted that a complaint had been made to the OLSC on 31 August 2022, that at some point it had been referred to the Law Society and that, as of June 2024, it was still unfinalised. Mr Wall set a new timetable for the parties to provide information concerning the costs assessment.

13. On 12 September 2024, YBL emailed Mr Wall and alleged that he had pre-determined the matter. Reference was made to the summons which YBL had filed on 29 August 2024 seeking a review of the Manager’s decision dated 13 August 2024. Mr Wall was told YBL would file a motion for a stay on 13 September 2024.

14. On 12 September 2024, Mr Wall wrote again to the parties emphasising that his earlier letter merely expressed his preliminary views. He said that the timetable in his first letter dated 12 September 2024 continued to apply.

15. On 19 September 2024, YBL informed Mr Wall that the notice of motion seeking a stay was returnable on 25 September 2024.

16. On 20 September 2024, Mr Wall informed the parties that until and unless the Court stayed the costs assessment, the timetable in his previous letter continued to apply.

17. As noted above, the parties agreed consent orders on 14 October 2024 staying the costs assessment. It is evident, however, that, remarkably, neither party advised Mr Wall of this significant development.

18. As Mr Wall explained in his letter dated 19 February 2025, not having been notified of the stay and in circumstances where he received nothing of any substance from either party, on 23 October 2024 he finalised the costs assessment and sent his C1 and C3 Certificate and reasons to the Court. It is evident that this material has not yet been forwarded to the parties.

19. The evidence is unclear as to if and when the parties were told that the 23 October 2024 determination had been reached, prior to receiving Mr Wall's letter dated 19 February 2025.

20. It appears, that Mr Wall's letter dated 19 February 2025 was sent in response to an inquiry made by Mr Amirbeaggi on 17 February 2025 as to the status of the costs assessment. The inquiry was prompted by an invoice which Mr Amirbeaggi had received on that day relating to the costs assessment. In his inquiry, Mr Amirbeaggi said that there was no completed assessment because the assessment had been stayed by the orders dated 14 October 2024. He inquired about the status of the assessment and said that if it had been completed, it would need to be set aside.

21. It may be noted that YBL has taken no step to amend the summons to seek to have the assessment set aside. Presumably, for this to be considered it would have been necessary for it to obtain leave to amend the summons and to join Mr Wall (and perhaps also the Manager) as a defendant.

22. The evidence before me does not include a copy of Mr Wall’s determination or the certificates referred to in his letter dated 19 February 2025 (see UCPR r 36.10 and ss 70 and 71 of the Act). Nor does the evidence indicate whether or not the amounts determined by Mr Wall as payable have been registered for the purposes of s 71(3) of the Act.

23. Having regard to the events above, there is no utility in the proceedings. That is simply because the formal determination of the costs assessment has overtaken both the stay and the underlying proceedings.

24. It is a matter for YBL to determine what action, if any, it may wish to take in terms of initiating a challenge to Mr Wall's assessment.

Costs

25. The only issue remaining for determination is the costs of the summons and the notice of motion, both of which will be dismissed having regard to the events above.

26. The leading case on the award of costs in a case which has been resolved or rendered futile without a hearing on the merits is that of McHugh J in Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6 at [6]-[9].

27. In brief, his Honour said that where it appears that both parties have acted reasonably in commencing and defending proceedings and that conduct continued to be reasonable until the litigation was settled or its further prosecution became futile, as is the case here, the proper exercise of the costs discretion usually involves the Court making no order as to the costs of the proceedings. His Honour described as "rare", cases such as Pincus J's decision in The South East Queensland Electricity Board v Australian Telecommunications Commission (Federal Court of Australia, 10 February 1989, unrep), where a costs order was made in favour of the applicant on the evident basis that Pincus J was satisfied that, without hearing the matter on its merits, the applicant was almost certain to have succeeded if the matter had gone to trial.

28. The relevant principles were described by Payne JA in Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681; [2018] NSWCA 84 at [30] (Meagher JA agreeing):

If both parties to a proceeding which has been settled without a hearing on the merits have acted reasonably in commencing and defending the proceedings, and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings.

29. In the matter before me, Mr Amirbeaggi said that there ought to be no order for costs, save that he has submitted that the parties should share the costs of the hearing allocation fee in relation to today’s hearing. Mr Luo, who appeared for the defendants, seeks an order for costs in favour of the defendants.

30. I consider that, apart from not notifying Mr Wall of the fact of the stay, the parties have acted reasonably in the conduct of the litigation. I reject YBL’s claim that the defendants acted unreasonably because it is alleged that they continued to prosecute their application for costs assessment before Mr Wall, notwithstanding the stay order dated 14 October 2024 to which they had consented.

31. This allegation is raised in YBL's written submissions dated 5 March 2025. The allegation is made under a heading "Stay and Contempt".

32. As I have highlighted above, Mr Wall continued to conduct the costs assessment until it was finalised on 23 October 2024. This appears to have occurred because no-one informed him of the fact that the parties had consented to a stay of the assessment on 14 October 2024. Mr Wall cannot be criticised for proceeding as he did, particularly when he made it clear to the parties on several occasions that he would proceed in the absence of a stay.

33. It is difficult to understand the basis for YBL's serious allegation that the defendants are in contempt. YBL was unable to point to any evidence which indicated that the defendants actively participated in the costs assessment process post 14 October 2024. YBL has not pointed to any other aspect of the defendants’ conduct of the proceedings to date which warrants a finding that they have acted unreasonably.

34. Nor am I satisfied that this is one of those rare cases where the Court can say with confidence that YBL's summons would almost certainly have succeed if it had proceeded to trial. The parties' written submissions filed in advance of the hearing indicate that the issues raised by the summons were contestable and neither party could be assured of success.

35. For all these reasons, I consider that the appropriate course is to make no order as to costs in relation to either the summons or the notice of motion. The parties must bear their own costs. The plaintiff should bear the costs of the hearing allocation fee.

Conclusion

36. For all these reasons, the Court makes the following orders:

1. The summons filed 29 August 2024 is dismissed.

2. The notice of motion filed 7 November 2024 is dismissed.

3. There be no order as to costs.

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Decision last updated: 11 March 2025