Baker v Kearney

[1999] NSWSC 1241

CITATION:	Baker & Anor v Kearney [1999] NSWSC 1241
CURRENT JURISDICTION:	Common Law
FILE NUMBER(S):	13047/1998
HEARING DATE(S):	8 December 1999
JUDGMENT DATE:	16 December 1999
PARTIES :	Alan Howard Baker (First Plaintiff) Jiwira Pty Limited (Second Plaintiff) v James Aloysius Kearney (Defendant)
JUDGMENT OF:	Master Malpass

LOWER COURT JURISDICTION:	Costs Assessment
LOWER COURT FILE NUMBER(S) :	92622/1997
LOWER COURT JUDICIAL OFFICER:	Mr Hattersley

COUNSEL :	Mr J R Young (Plaintiffs) Mr P Lever-Naylor (Defendant)
SOLICITORS:	Leary & Company (Plaintiffs) Perkes & Stone (Defendant)
CATCHWORDS:	Leave to appeal and extension of time; sufficiency of reasons; counsel’s fees; unfair or unreasonable.
ACTS CITED:	Legal Profession Act 1987, s 208A (2), s 208M.
CASES CITED:	N/A.
DECISION:	See paragraph 31.

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER MALPASS

THURSDAY 16 DECEMBER 1999

13047/1998 ALAN HOWARD BAKER & ANOR v JAMES ALOYSIUS KEARNEY

JUDGMENT


1   The defendant is a barrister. He provided legal services for the plaintiffs. The work was performed in chambers. A significant part of it involved the reviewing of documentation and drafting work (including a draft Statement of Claim and a draft Reply to a Request for Further and Better Particulars). The work was performed during a period between 15 May 1995 and 8 January 1997. He rendered fees in the total sum of $61,510. He gave them a “a Memorandum of Fees due to James A Kearney (Bill of Costs)” dated 15 January 1997.

2   None of the fees have been paid. On 17 December 1997, the defendant applied to this Court for an assessment of costs. The application was referred to a costs assessor (Mr Hattersley). He received submissions from the parties. He had the opportunity to inspect documents in the chambers of the defendant (five A4 folders). The assessment appears to have been a protracted exercise. A Certificate of Determination was issued on 13 November 1998. The determination allowed the costs in full (in effect, he determined the application by confirming the Bill of Costs).

3   The Costs Assessor sent the certificate under cover of a letter of the same date. It contained inter alia the following:-

“I have now considered all of the material and evidence put before me by yourselves and Perkes & Stone solicitors acting for Mr James Kearney.

I have determined that the fees charged by Mr James Kearney the subject of this application are fair and reasonable in all of the circumstances of the complex matters he dealt with for the respondents.”
4   There was a subsequent letter from the Costs Assessor. It was dated 27 November 1999. The court was told that it was a response to a request for reasons. The letter included the following:-
“In this application for assessment I issued a Certificate of Determination as to Costs which confirmed the barrister’s costs charged to the respondents - see Section 208A(2) of the Legal Profession Act 1987 as amended. In these circumstances I maintain I am under no obligation to provide reasons for making that determination and I therefore decline to do so.”


5 The plaintiffs have filed a Summons For Leave To Appeal. The object of the process is to seek leave of the court to appeal against the determination pursuant to s 208M of the Legal Profession Act 1987 (the Act). As the application has been brought out of time, the plaintiffs also need an extension of time to bring the application for leave.

6   The court has a discretionary power to both extend time and to grant leave. The power is exercised having regard to the relevant circumstances of the particular case before the court and so that justice is best served between the parties. The party seeking relief bears the onus of satisfying the court of entitlement thereto.

7   The hearing took place on 8 December 1999. The evidence was parsimonious. Ultimately, none of the plaintiffs’ affidavit material was received in evidence. The plaintiffs did tender documentation. Exhibit A was the application in the assessment proceedings (a part of that document was the defendant’s Bill of Costs). Exhibit B comprised three documents (including the certificate). Exhibit C was the Statement of Claim which had been drafted by the defendant. Exhibit D was the draft Reply to a Request for Further and Better Particulars. The defendant relied on an affidavit sworn by Mr Moore (the solicitor for the defendant).

8   It is convenient to first look at the merits of the application for leave. Clearly, there would be no utility in granting an extension of time if the application for leave had no real prospects of success.

9   Broadly speaking, the plaintiffs advanced two arguments in support of the application for leave. It was said that there had been a failure to give reasons. This was advanced as an error of law. It was said that leave should be given because the quantum of the bill on its face was staggeringly excessive. This was advanced as an error of fact.

10   The submissions made to the Costs Assessor have not been placed before the court. However, the court has been informed that there was only one issue agitated in the assessment. This was a limited issue as to whether or not the costs charged were excessive.

11   For completeness, I should mention that an attempt was made during the hearing to agitate “the quality of the work” as a ground for leave. As it had not been agitated before the Costs Assessor, it seemed to me that in the circumstances of this case, the plaintiffs should not now be allowed to rely on it.

12   The Bill of Costs falls into three sections. There is work that was performed up to 17 July 1995 and which concluded with the drafting of a Statement of Claim. A charge of $34,458 was made for this work. There was work done between 16 August 1995 and 18 December 1995. During the course of the performance of this work the draft Reply to Request for Further and Better Particulars was prepared. The balance of the Memorandum of Fees or Bill of Costs relates to work done between 11 March 1996 and 8 January 1997.

13   It appears that the costing was done in accordance with an hourly rate. At no stage, has it been said that the hourly rate was not reasonable. The dispute has related only to the number of hours in respect of which the rate was charged. It is not in dispute that the defendant actually performed work for the hours at which the charge was made. The limited issue between the parties both before the Costs Assessor and this Court was whether or not the time expended in performance of the work was excessive.

14   The court has been told that the work was done in relation to a commercial matter. There was inter alia complexity. There was considerable documentation. There were five folders of documents. The draft Statement of Claim alleged many causes of action and exceeded 50 pages and the draft reply extended to 43 pages.

15   The difficulty for the court is the lack of relevant evidence. It does not have before it all of the material which would enable an assessment of the degree of the complexity and the quantum of the volume of documentation that had to be handled by the defendant. Whilst the Costs Assessor had the opportunity to inspect certain documentation, the court did not have that advantage.

16   The parties have referred to authorities which deal with the question of the giving of reasons for a determination by a costs assessor. It has been held that there is an obligation to give reasons. The approach has been taken that a failure to sufficiently disclose the reasoning process may amount to error of law justifying a disturbing of the determination.

17   What needs to be done by a costs assessor, by way of disclosure of reasoning process, can be expected to vary from case to case. There may be cases in which a formal expression of the reasoning process will be of no significance. There will be cases in which the reasoning process is sufficiently revealed by documentation in the assessment (including correspondence and/or the certificate itself).

18   In this case, there was only one issue. This was identified by the Costs Assessor in a letter dated 1 April 1998 (“The gravamen of the respondents’ objections would seem to be their claim that the time spent by the applicant in performing the tasks set out in the bill are ‘excessive’ ”).

19   It may be further added that the Costs Assessor did seek further assistance from the plaintiffs as to their claim that the bill was excessive (see letter dated 1 April 1998). There is nothing before the court to suggest that this plea received any positive response. It seems that the Costs Assessor may have been left with an objection which was framed in the most general of terms.

20 I digress to mention the provisions of s 208A (2) of the Act. It was not the subject of argument during the hearing. Accordingly, I do no more than make passing reference to those provisions.

21   The provisions purport to require the Costs Assessor to either determine the application by confirming the Bill of Costs or disallow or reduce disputed costs in respect of which he is satisfied are unfair or unreasonable.

22   It has been said that the provision was intended to impose a limitation on what may be disallowed or reduced in cases where the assessment involves a Bill of Costs. It may also be said to have relevance to the question of the sufficiency of the disclosure of the reasoning process.

23   In this case, the determination had the effect of confirming the Bill of Costs. By implication it could be taken to follow that the Costs Assessor was not satisfied that the disputed costs in this case were unfair or unreasonable. Depending on the circumstances of the case, and subject to what may be required by the regulations, a statement of confirmation of a bill of costs may be said to satisfy the requirement to provide reasons. In this case, there is no need to look to any implication. Despite what was said in the subsequent letter, the Costs Assessor had in fact gone further by expressly disclosing that he had allowed all of the fees because he had reasoned that they were fair and reasonable.

24   Be that as it may, in this particular case, it seems to me that he did sufficiently express his reasoning process (even though this may be said to have been done in general terms and in an economical fashion).

25   In correspondence, the Costs Assessor stated that he had determined that all of the fees charged by the defendant were fair and reasonable “in all of the circumstances of the complex matters” dealt with. In the subsequent letter, he informed the plaintiffs that he had confirmed the Bill of Costs.

26   It seems to me that the expression of reasoning process given by the Costs Assessor clearly and effectively rejected the one issue which had been litigated in the assessment (which was in effect a general one of unfairness or unreasonableness) and stated the grounds upon which that rejection was based. I am not persuaded that anything further could have been usefully said by way of disclosure of reasoning process.

27   This is not a case where the appellate process has been frustrated by inadequate disclosure of reasoning. I should add that even if a different view had been taken as to the sufficiency of the expression of reasoning process, I am not satisfied that any shortcomings would have been of significance.

28   At first blush, it may seem that a large number of hours have been expended in the performance of the work and that the Bill of Costs is a large one. But these matters had to be considered in the context of all of the material made available to the Costs Assessor. The work was said to be done in respect of a commercial matter (it involved a farmer, his company and a bank). It had complexity. There was a substantial volume of documentation to consider. Exhibits C and D reveal that documents of considerable volume were drafted by the defendant. The court can only act on the material placed before it. In the light of that material I am not satisfied that there is an arguable case that the determination was not open to the Costs Assessor on the material made available to him. I am not satisfied that there is any arguable error or other matter which would justify the granting of leave to appeal. I am not satisfied that justice would be best served by allowing the application.

29   In the circumstances of this case, I am not satisfied that the plaintiffs have demonstrated an entitlement to leave. In these circumstances, there would be no utility in granting an extension of time.

30   Some mention was made of delay and lack of explanation for delay. No explanation has been offered. However, the delay was small. In the circumstances of this case, these matters may not have been of significance if a case for leave had been advanced. Perhaps it might also have had to be borne in mind that if relief was granted it may cause hardship to the defendant. The matter has been on foot for a long time.

31   The Summons is dismissed. The plaintiffs are to pay the costs of the Summons. The Exhibits may be returned.
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Last Modified: 12/20/1999