Bechara v Annis-Brown

[2003] NSWSC 1034

CITATION:	Bechara v Annis-Brown [2003] NSWSC 1034
HEARING DATE(S):	5 November 2003
JUDGMENT DATE:	12 November 2003
JURISDICTION:	Common Law
JUDGMENT OF:	Master Harrison
DECISION:	(1) The appeal is dismissed; (2) The orders of Magistrate Ellis dated 13 May 2003 are affirmed; (3) The amended summons filed 9 July 2003 is dismissed; (4) The plaintiff is to pay the defendant's costs as assessed or agreed.
CATCHWORDS:	Appeal decision of Local Court Magistrate - interest - indemnity costs
LEGISLATION CITED:	Local Courts (Civil Claims) Act 1970 (NSW) - s 69
CASES CITED:	Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Devries v Australian National Railways Commission (1993) 177 CLR 472 House v The King (1936) 55 CLR 499 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588
PARTIES :	Maria Bechara t/as Bechara & Company (Plaintiff) Wayne Annis-Brown t/as Lincoln Smith & Company (Defendant)
FILE NUMBER(S):	SC 11404/2003
COUNSEL:	Mr P W Neils SC (Plaintiff) Mr M Skinner (Defendant)
SOLICITORS:	Ms Maria Bechara, Bechara & Company (Plaintiff) Mr W Annis-Brown, Lincoln Smith & Company (Defendant)

LOWER COURTJURISDICTION:	Local Court
LOWER COURT FILE NUMBER(S):	8991/2002
LOWER COURT JUDICIAL OFFICER :	Ellis LCM

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER HARRISON

WEDNESDAY, 12 NOVEMBER 2003

11404/2003 - MARIA BECHARA t/as BECHARA &
COMPANY v WAYNE ANNIS-BROWN
t/as LINCOLN SMITH & COMPANY
JUDGMENT (Appeal decision of LCM – interest,
indemnity costs)

1 MASTER: By amended summons filed 9 July 2003, the plaintiff seeks firstly, an order that the appeal be allowed; secondly, an order that the decision of Magistrate Ellis in proceedings number 8991/2002 be quashed; thirdly, an order that the verdict and judgment entered by the Magistrate against the plaintiff be set aside; fourthly, an order that the order made by the Magistrate for costs and interest be set aside; and fifthly, an order that judgment be entered for the plaintiff in the said proceedings. The plaintiff relied on the affidavit of Maria Bechara sworn 9 September 2003.

2 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by the plaintiff. Section 69(2) of the Local Courts (Civil Claims) Act 1970 (NSW) permits a party who is dissatisfied with a judgment as being erroneous in point of law to appeal to this Court. Leave is required to appeal against an order as to costs. The onus lies on the plaintiff to demonstrate that there has been an error of law. What is a question of law (as opposed to a question of fact) was considered, inter alia, in Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 and Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156. It cannot be said that the Magistrate acted on evidence inconsistent with facts incontrovertibly established by the evidence - see Devries v Australian National Railways Commission (1993) 177 CLR 472 per Brennan, Gaudron and McHugh JJ at 479 and State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588. This matter has been referred to a Master for hearing by the list Judge.

Grounds of appeal

3 The plaintiff appeals the decision of Ellis LCM dated 13 May 2003 on the grounds that the learned Magistrate erred firstly, in finding that the document dated 1 February 2001 provided by John Alho to the plaintiff constituted an operative and/or unconditional instruction for the plaintiff to pay $23,155.29 to the defendant; secondly, in failing to find that the document dated 19 February 2003 (and received by the plaintiff on 21 February 2003) provided by John Alho to the plaintiff constituted the first instruction of John Alho to the plaintiff to pay monies by way of costs and disbursements to the defendant; thirdly, in finding that the defendant was entitled to a verdict in the said proceedings based upon the document dated 1 February 2001; fourthly, in ordering that the plaintiff pay the defendant’s costs of the proceedings on an indemnity basis or at all; and fifthly, in ordering that the plaintiff pay the defendant interest on the verdict awarded to him. The plaintiff’s Counsel submitted that because the Magistrate made an error of law in relation to the awarding of interest, this reasoning infected her costs decision and it is for this reason leave should be given so far as the costs order is concerned.

4 The principles according to which this Court is to decide whether the learned Magistrate's discretionary decision in relation to interest and costs did indeed miscarry are not in doubt. They are stated definitively in a short passage in the joint judgment of Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 504-505. It is, I think, useful to re-state them. They are as follows:

"The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred."

Local Court proceedings

5 The proceedings in the Local Court were commenced by statement of liquidated claim filed on 6 August 2002. It pleads that the plaintiff (defendant in the proceeding before me) and the defendant (plaintiff in the proceedings before me) are solicitors and carry on business under the names of Lincoln Smith & Company (Lincoln Smith) and Bechara & Company (Bechara) respectively. In a period up to 3 November 2000, the plaintiff acted as solicitor for John Alho in proceedings commenced in the District Court No 7373/1999 (the Alho proceedings). The conduct of the Alho proceedings was then taken over by Bechara. On 10 October 2001, following the rehearing of an arbitration Mr Alho’s proceedings were determined. Certoma DCAJ gave a verdict for the plaintiff.

6 At the outset of the hearing there was agreement for payment of Lincoln Smith’s professional fees for acting for Mr Alho. That left in dispute before the Magistrate whether interest should be awarded and the issue of costs. The Magistrate ordered that the plaintiff pay interest from 10 October 2001 (the date of the judgment in the District Court in the Alho matter) to the date of payment of the fees and ordered that the defendant pay the plaintiff’s costs on an indemnity basis.

7 There was a series of correspondence between the plaintiff and defendant, and at times Mr Alho. The plaintiff’s Counsel referred to a number of documents, but in particular Exs 2 and 3 which he submitted the Magistrate overlooked or misconstrued in her reasons for judgment.

8 In a letter dated 1 February 2001 from the defendant to the plaintiff, there appears a handwritten note by Mr Alho which concluded:

“… Although I feel that the amount of $23,155.29, which Rafe and Mark are claiming, is obsurd (sic), I am agreeing to pay for it.
I would like to pay this money in instalments from my pension taking effect A.S.A.P.”

9 On 26 March 2001, there is a letter from the plaintiff to Mr Alho enclosing a copy of a letter sent to the defendant on that date “which has been forwarded in accordance with your instructions”. Mr Alho confirmed those instructions by signing and dating a copy of the letter and returning it to the plaintiff. The letter bears his signature and the date 27/3/01 at the foot of the page.

10 The attached letter is reproduced below:

“ RE: JOHN ALHO –v- ARTHUR STANTON
DISTRICT COURT PROCEEDINGS NUMBERED 7373 OF 1999
Pursuant to Practice Rule 29 of the Professional Conduct and Practice Rules and in consideration of you releasing to this firm the files and papers which you hold relating to the above matter, the undersigned acknowledges and agrees:-
1. That your firm has claimed costs and disbursements (including Counsel’s fees and medico legal reports) in the total sum of $23,155.92. The undersigned will undertake to pay your costs as agreed or assessed.
2. The undersigned will protect you for the payment of unpaid costs by ensuring that your firm’s costs and disbursements, as agreed or assessed, will be paid out of the proceeds of any verdict, judgment or settlement of the matter in priority to any other moneys which are or might be payable to any other party (including Mr Alho).
3. That the undertaking given by the undersigned is binding upon the firm personally.
4. The undersigned or this firm will not release the files and papers or copies thereof to any other solicitor without first obtaining your written consent and a written undertaking from that solicitor addressed to you (sic) firm in the same terms of this document.”

11 The plaintiff’s Counsel submitted that the authority was conditional upon the costs being assessed or agreed (and they had not been) and that the authority was a revokable one. This undertaking differs from an earlier form of undertaking drafted by the defendant. Other than this document, there was no evidence that at any time Mr Alho resiled from paying the sum of $23,155.29. On 19 February 2003, Mr Alho authorised and directed the plaintiff to pay the amount of $24,474.52 to the defendant.

12 In her reasons the Magistrate stated:

“In this case I am of the view that notice was clearly given by the plaintiff to the defendant such that the defendant could have been in no doubt as to the claim by the plaintiff. It was clearly stated it was for costs, it was clearly enunciated as early as February 2001 as to exactly what that was and the fact that the payment did not start to eventuate on and from 10 October in my opinion based on the decision of Twigg v Kung does not matter.
I am of the opinion that the defendant had been put on notice for a considerable period of time that there is the demand by the plaintiff to the defendant. Further the undertaking was clearly given and I only need to determine from what point of time interest would accrue. What I have looked at is the fact that the District Court decision was on 10 October 2001. I have also looked at the costs agreement which normally gives 30 days after an account is rendered before it commences calculation. While that account was rendered by way of letter on 1 February 2001, even bearing in mind the 30 days interest, I am of the opinion that is too early a point in time because of the fact that that was before any payment was in fact available for the defendant to pay to the plaintiff. I therefore waive the 30 days that are stated in the costs agreement and date interest to be calculated from 10 October 2001. There is no evidence before me as to when the payment was in fact made but interest in my opinion is appropriate to be dated from that date.

13 It was open to the Magistrate to make the findings that she did. It was open to the Magistrate to find that Mr Alho agreed to pay the defendant’s costs as far back as 25 March 2001, and that the funds from the litigation became payable following the District Court judgment. There has been no error in principle nor in the exercise of discretion. The Magistrate discussed the principles that were to be considered awarding indemnity costs and then made such an order. There has been no error of principle in the awarding of costs.

14 There is no error of law. The appeal is dismissed. The orders of Magistrate Ellis dated 13 May 2003 are affirmed. The amended summons filed 9 July 2003 is dismissed.

15 Costs are discretionary. Normally costs follow the event. The plaintiff is to pay the defendant’s costs as assessed or agreed.

16 The Court orders:

(1) The appeal is dismissed.

(2) The orders of Magistrate Ellis dated 13 May 2003 are affirmed.

(3) The amended summons filed 9 July 2003 is dismissed.

(4) The plaintiff is to pay the defendant’s costs as assessed or agreed.
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Last Modified: 11/13/2003