Clayton Utz v Ceccon Transport Pty Ltd (No 2)
[2023] NTSC 102
•13 December 2023
CITATION:Clayton Utz v Ceccon Transport Pty Ltd & Ors (No 2) [2023] NTSC 102
PARTIES:CLAYTON UTZ
(ABN 35 740 217 343)v
CECCON TRANSPORT PTY LTD
(ACN 009 595 911)And
CECCON, Suzanne Yoko
And
PERRY, Robert
TITLE OF COURT: SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION: SUPREME COURT exercising Territory jurisdiction
FILE NO:2021-02436-SC
DELIVERED: 13 December 2023
HEARING DATE: Written submissions filed:
5, 12 October and 3 November 2023
JUDGMENT OF: Brownhill J
CATCHWORDS:
COSTS – Costs assessment – Section 362(2)(b) Legal Profession Act 2006 (NT) – Where appeal against decision of costs assessor as to matter of law allowed – Where no power or jurisdiction of the Court to determine costs assessment application – Where reasonable apprehension of bias on the part of the costs assessor – Whether Court has power to remit costs assessment application to different costs assessor – Implied power – Court’s decision on the appeal remitted to different costs assessor
COSTS – Taxation of costs – Part 6 of Order 63 Supreme Court Rules 1987 (NT) – Solicitor and own client taxation – Where appeal against decision of costs assessor as to matter of law allowed – Whether costs permitted to be taxed in Court – Where statutory scheme renders inherent jurisdiction of Court a residual jurisdiction – Where statutory costs assessment application remains on foot – No proper basis upon which to exercise the residual inherent jurisdiction to order a taxation under Part 6 of Order 63
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; Clayton Utz v Ceccon Transport Pty Ltd & Ors [2023] NTSC 76; Comcare v Broadhurst (2011) 192 FCR 497; Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; Harrison v Tew [1990] 2 AC 523; Lissenden v Dellios [2021] VSC 520; Minister for Immigration and Multicultural Affairs v Wang (2003) 215 CLR 518; Pryles & Defteros (a firm) v Green (1999) 20 WAR 541; QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13; Re Johnson and Weatherall (1888) 37 Ch D 433; Storer & Co v Johnson (1890) 15 App Cas 203; Sutton v Sears [1960] 2 QB 97; Symbol Park Lane Ltd v Steggles Palmer (a firm) [1985] 2 All ER 167; University of New South Wales v Moorhouse (1975) 133 CLR 1; Woolf v Snipe (1933) 48 CLR 677, referred to
Legal Profession Act 2006 (NT) ss 332, 339, 362, 366
Supreme Court Rules 1987 (NT) rr 63.01, 63.27, 63.40, 63.56, 63.63
DC Pearce & S Argument, Delegated Legislation in Australia (Lexis Nexis, 5th ed, 2017)
GE Dal Pont, Law of Costs (LexisNexis, 5th ed, 2021)
REPRESENTATION:
Counsel:
Appellant:M Castle & M Spain
First & Second Respondents: P Maher
Third Respondent: No appearance
Solicitors:
Appellant:Clayton Utz
First & Second Respondents: Maher Raumteen Solicitors
Third Respondent: No appearance
Judgment category classification: B
Judgment ID Number: Bro2319
Number of pages: 17
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWINClayton Utz v Ceccon Transport Pty Ltd & Ors (No 2) [2023] NTSC 102
No. 2021-02436-SC
BETWEEN:
CLAYTON UTZ
(ABN 35 740 217 343)
Appellant
AND:
CECCON TRANSPORT PTY LTD
(ACN 009 595 911)
First Respondent
SUZANNE YOKO CECCON Second Respondent
ROBERTPERRY
Third Respondent
CORAM: BROWNHILL J
REASONS FOR JUDGMENT
(Delivered 13 December 2023)
On 31 August 2023, I delivered judgment in an appeal to this Court from a determination of a costs assessment application under the Legal Profession Act 2006 (NT) (‘LPA’).[1] The procedural history was set out in those reasons and the terms defined and used in those reasons are adopted in these reasons.
The judgment was a declaration that the Court does not have power and jurisdiction to determine the Ceccon parties’ costs assessment application or the costs of the costs assessment under s 362(2)(a) of the LPA. I ordered the parties to file written submissions in relation to the consequential orders to be made, including as to the remaining costs of the appeal, with the consequential orders to be determined on the papers.
The orders made on 6 May 2022
In the reasons for decision about the judgment on appeal, I held (at [40]) that it must follow from the reasoning therein that the orders made by consent on 6 May 2022 must be vacated. Those orders were that, pursuant to s 362(2)(a) of the LPA, the Court will make the determination of the assessment of costs raised by the Ceccon parties’ application dated 9 July 2020, and the costs of that assessment, as in its opinion should have been made by the third respondent, and that the determination be made by the Associate Judge. As set out above, I gave the parties the opportunity to make submissions about whether those orders should be vacated, and what other consequential orders should be made.
Both parties, albeit not expressly, acknowledged that the orders made on 6 May 2022 should be vacated. An order will be made vacating those orders.
Reasonable apprehension of bias on the part of the costs assessor
Clayton Utz argued that the Court should order: (a) that the matter be remitted to a costs assessor other than the third respondent, as agreed by the parties or, failing agreement, to be appointed by the Law Society, on the basis that there is a reasonable apprehension of bias; and (b) that the matter be remitted for re-determination of the Ceccon parties’ application dated 9 July 2020 in accordance with law.
The basis of Clayton Utz’s submission as to a reasonable apprehension of bias was that the third respondent had taken a view, expressed in a letter to the Law Society, that Clayton Utz’s then General Counsel had engaged, during the course of the costs assessment, in ‘unsatisfactory professional conduct or professional misconduct’. The letter asked the Law Society to consider ‘a regulatory response’.
The letter was argued to be inconsistent with the principle in R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 because the letter involved the third respondent engaging with the conduct or actions of one party to the costs assessment in the context of a potential for the matter to be remitted to the third respondent upon the determination of the appeal. It was argued that, because of the letter sent by the third respondent, a fair minded lay observer might reasonably apprehend that the third respondent might not bring an impartial mind to the resolution of the costs assessment if it were remitted to him, that being the criteria for apprehended bias.[2]
The Ceccon parties took no position and made no submission on the question of whether there is a reasonable apprehension of bias. There is therefore no dispute between the parties that the sending of the letter by the third respondent has given rise to a reasonable apprehension of bias.
That position permits the Court to proceed on the basis that there is a reasonable apprehension of bias on the part of the third respondent.
Power to remit the costs assessment application to a different costs assessor
The Ceccon parties argued that it is not clear that the Court has the power to remit the costs assessment application to a different costs assessor.
Section 362(2)(b) of the LPA provides that, unless the Court affirms the costs assessor’s decision, it may remit its decision on the question the subject of the appeal ‘to the assessor and order the assessor to re-determine the application’. By those terms, the Court is empowered to remit the decision on the question the subject of the appeal to the costs assessor who made the decision appealed from. There is no express power to remit the decision on the question the subject of the appeal to a different costs assessor.
Clayton Utz relied on the decision of the Full Court of the Federal Court in Comcare v Broadhurst (2011) 192 FCR 497, in which Tracey and Flick JJ (Downes J dissenting) held (at [94]) that the power of the Federal Court to make orders or give directions as to the future constitution of the Administrative Appeals Tribunal when an appeal has been allowed has not been questioned. In the relevant statute in that case, there was a provision (set out at [89]) which said that, if the Federal Court makes an order remitting a case to be heard and decided again by the Tribunal, the Tribunal need not be constituted for the hearing by the person or persons who made the decision to which the appeal relates. There is no such provision in the LPA and the terms of s 362(2)(b) suggest that the remitter is to ‘the’ costs assessor who made the decision appealed from.
In Minister for Immigration and Multicultural Affairs v Wang (2003) 215 CLR 518, the High Court held that the Federal Court had power, on a remitter following a successful appeal, to order that the Refugee Review Tribunal be constituted by the member who had conducted the original review (the decision appealed from). The relevant statutory provision empowered the Federal Court to make an order referring the matter to which the decision relates ‘to the person who made the decision for further consideration, subject to such directions as the Court thinks fit’. The provision also empowered the Court to make an order ‘directing any of the parties to do, or to refrain from doing, any act or thing the doing or the refraining from the doing, of which the Federal Court considers necessary to do justice between the parties’. Gleeson CJ held (at [4]) that the power to give ‘such directions as the Court thinks fit’ included, in a proper case, a power to direct that, on a further hearing, the Tribunal should be differently constituted from the original Tribunal whose decision was under review, and equally, a power to direct that a matter be remitted to the member who constituted the original Tribunal. McHugh J held (at [22]) that the power to give ‘such directions as the Court thinks fit’ did not confer power to direct the constitution of the Tribunal on a future hearing, but the provision empowering the Court to direct the parties ‘to do, or to refrain from doing, any act or thing’ did confer that power. His Honour held (at [40]) that the latter power was more specific than the former, being qualified by what is necessary to do justice between the parties, and was the source of the power to direct, for example, in a bias case, that a particular person not constitute the Tribunal. Kirby J held (at [113]-[125]) that the power to give ‘such directions as the Court thinks fit’ conferred power to direct that the Tribunal be constituted either differently or the same as the original Tribunal.
Section 362(2) of the LPA does not contain an express power in the Court to make such directions as the Court thinks fit when remitting its decision to the costs assessor for re-determination. However, it seems undeniable that a power to remit its decision to another costs assessor and order another costs assessor to re-determine the application exists. There are a number of reasons for this. First, it is plainly possible that the original costs assessor may not be able to re-determine the application, for example, because they have died or their appointment has ceased. Secondly, it is plainly possible that a re-determination by the original costs assessor would be unlawful, for example, because the original costs assessor’s decision is set aside for reasons of actual or apprehended bias. Thirdly, it is plainly possible that a re-determination by the original costs assessor would be, for whatever reason, undesirable because it would not be in the interests of justice. These possibilities should be accommodated by implying a power in the Court to remit the matter to a different costs assessor because, without it, the appeal contemplated by s 362, which is directed to the correction of the identified error, could be rendered a nullity by such circumstances. Fourthly, there is nothing in the LPA, particularly related to the appointment of costs assessors or their allocation to a particular costs assessment application, with which such a power in the Court would be inconsistent.
It is, therefore, abundantly clear that the Court has power in s 362(2)(b) to remit its decision on the question the subject of the appeal to a costs assessor other than the original costs assessor to re-determine the application.
It would follow from such an order that the costs assessor would be required to determine the application in accordance with the law and upon the basis of facts found by that costs assessor in accordance with the evidence before them on the re-determination (which may include fresh evidence in accordance with s 362(3) of the LPA).
Order the Clayton Utz invoices to be taxed under Part 6 of Order 63 of the SCRs
The Ceccon parties argued that there is a ‘better alternative’ than remitter under s 362(2)(b) of the LPA available, namely that the Court order, under r 63.63 of the Supreme Court Rules 1987 (NT) (‘SCRs’), that the Clayton Utz invoices be taxed.
Clayton Utz argued that this alternative is not available, for a number of reasons, which are dealt with below.
Part 6 of Order 63 of the SCRs provides for the taxation by the Taxing Master[3] of costs payable to a solicitor by their client or a person other than the client. The process is commonly referred to as ‘solicitor and own client taxation’ and is a different process to taxation as between party and party on the indemnity basis (see SCR 63.27), which is also sometimes referred to as the ‘solicitor and client basis’.
In this context, ‘taxation’ refers simply to the independent review, by an officer of the Court, of lawyer-client bills of costs.[4]
SCR 63.56(a) provides that Part 6 of Order 63 of the SCRs applies where costs are payable to a solicitor by their client, whether or not in respect of a proceeding in the Court, and ‘by or under an Act, these Rules or an order of the Court or an agreement between the solicitor and the client the costs are required or permitted to be taxed in the Court’.
Clayton Utz argued that SCR 63.56(a) was not satisfied in this case because the costs agreements between Clayton Utz and the Ceccon parties did not require or permit the legal costs to be taxed in the Court.
That argument misconstrues the words in SCR 63.56(a). Those words provide that Part 6 of Order 63 applies only where:
(a)costs are payable to a solicitor by their client; and
(b)by or under:
(i)an Act; or
(ii)the SCRs; or
(iii)an order of the Court; or
(iv)an agreement between the solicitor and the client,
the costs are required or permitted to be taxed in the Court.
The relevant express criteria for the application of Part 6 is ‘by or under … an order of the Court … the costs are required or permitted to be taxed in the Court’. That is the order the Ceccon parties seek. That criteria is not constrained by a requirement that, if there is a costs agreement, it must require or permit the costs to be taxed in the Court.
Clayton Utz argued that the scheme of Part 6 is an indication that it does not apply when a client seeks ‘to have legal costs reviewed’. As set out above, ‘taxation’ is simply a form of independent review of legal costs. Leaving aside the procedural requirement for preparation of a ‘bill of costs’ (see below), there is no conceptual distinction between ‘taxation’ under Part 6 of Order 63 of the SCRs and a client’s desire to have their legal costs ‘reviewed’.
The Ceccon parties identified SCR 63.63 as the source of the Court’s power to make an order for the taxation of the costs payable to a solicitor by their client. SCR 63.63(1) provides that SCR 63.63 applies where the Court, by order, refers a bill of costs to the Taxing Master for taxation or directs that a bill of costs be taxed. SCR 63.63(2) and (3) set out the process by which a taxation to which the rule applies is to be brought before the Taxing Master. SCR 63.63 does not confer upon the Court the power to make an order that costs payable to a solicitor by their client are required or permitted to be taxed in the Court. Nor does it identify the basis upon which such a power would be exercised. So much follows from the following observation of Dixon J in Woolf v Snipe (1933) 48 CLR 677 at 681:
Rules of Court ought not to be construed as enlarging or conferring jurisdiction or affecting substantive rights. Many difficulties would ensue if this general principle were neglected and the rule were read, not as operating only within the existing jurisdiction of the Court, but as conferring upon both solicitor and client a new right to taxation in this Court.
The source of power in the Court to make an order under Part 6 is found in the inherent jurisdiction of superior courts to exercise control over the solicitors who practise in the Court, as officers of the Court, and which enables the Court to regulate the charges made for work done by those solicitors in that capacity.[5]
By Part 3.3, Division 8 of the LPA, express provision is made for a different form of ‘taxation’ or independent review of lawyer-client legal costs, namely the assessment of legal costs by a costs assessor appointed from the practising profession, who is not an officer of the Court when acting in that capacity (s 366(8), LPA).
The existence of the statutory process contained in Part 3.3, Division 8 of the LPA must be taken into account when considering whether the inherent jurisdiction should be exercised.[6] The statutory scheme is for the taxation (ie independent review) of a solicitor’s legal costs, which is of very broad application (a client may apply for an assessment of the whole or any part of legal costs: s 332(1)), whether or not the legal costs have been wholly or partly paid, and with or without a bill (s 332(3), (4)), but contains express limitations upon the exercise of the right to an assessment (such as the time limit for making an application (s 332(5), (6)) and expressly prescribes what the costs assessor must determine and consider in making the determination (eg, s 339). The scope and nature of the statutory scheme renders the inherent jurisdiction chiefly a residual jurisdiction.[7] The Court’s inherent power to order taxation under Part 6 of Order 63 rests upon the exercise of judicial discretion.[8]
The residual nature of the inherent jurisdiction is confirmed by SCR 63.56, which provides that Part 6 applies to the circumstances set out in its paragraphs ‘to the extent only that it does not conflict with Part 3.3 of the [LPA]’. Those words would appear to be an expression of the general principle of construction that delegated legislation may be invalid if it is inconsistent with either the Act under which it has been made or another Act.[9] At base, it is that principle which renders the inherent jurisdiction a residual one.
Clayton Utz submitted that, where a solicitor and their client have entered into a costs agreement which does not provide for costs to be taxed, Part 3.3 of the LPA is the only regime applicable and Part 6 of Order 63 would, in that circumstance, conflict with Part 3.3 of the LPA. Put that way, the proposition would deny the existence of the residual inherent jurisdiction in all cases in which a solicitor and client had entered into a costs agreement. That broad proposition cannot be accepted. It is inconsistent with the text of SCR 63.56 as set out in paragraph [23] above. Further, the inherent jurisdiction is invoked to do justice when dealing with an officer of the Court.[10] As Englefield JR observed in Lissenden v Dellios [2021] VSC 520 (at [42]):
While this inherent jurisdiction to reduce solicitor-own client costs has been applied in reported decisions that involve exorbitant demands or serious professional misconduct, that does not mean that the Court’s inherent jurisdiction to deal with solicitor-own client costs is limited to such cases. The inherent power of a superior court cannot be restricted to defined and closed categories. The inherent jurisdiction of the Court to deal with a party’s solicitor-own client costs does not require a threshold determination of a certain qualifying level of misconduct by their solicitors, it applies when the need arises to ensure that legal costs are ‘fair and reasonable and no more’.[11] [emphasis added]
Even so, the residual inherent jurisdiction would not be properly invoked where an assessment under a statutory scheme such as Part 3.3 of the LPA can be made, and has been reserved for cases where an assessment under the statutory scheme is not available (for example, because the time within which to make an application for a costs assessment has passed and cannot be extended) and justice requires that it should be made.[12] This has led one leading author to observe that:[13]
… the inherent jurisdiction has a practically negligible role in the modern law.
In the present case, an application for a costs assessment under Part 3.3 of the LPA was made by the Ceccon parties, an appeal to this Court from that assessment was allowed, with the consent of the Ceccon parties, and the only available option under s 362(2) of the LPA in the circumstances of this case is for the Court to remit the matter for re-determination. The Ceccon parties argued that there is currently no costs assessment under way. That is not correct. The costs assessment application of the Ceccon parties remains on foot. By the appeal process, the costs assessor’s decision has been set aside, but that has not set aside or finalised the application. So much follows from the Court’s power to remit and order a re-determination of the application in s 362(2)(b).
The Ceccon parties put various reasons in support of their proposal for a taxation under Part 6 of Order 63 of the SCRs, namely: (a) that a taxation under Part 6 is more likely to result in a final determination of the matter because it ‘bears the stamp of authority of the Court’; (b) the Clayton Utz invoices could be progressively taxed by the Taxing Master, informing the parties as to prospects on the remaining invoices and enhancing the prospects of settlement; (c) the form of the Clayton Utz invoices raises a risk that a costs assessor would refuse to assess them because of a view they do not fall within Division 8 of Part 3.3; (d) there is a risk of another erroneous costs assessment requiring a further appeal; (e) no costs assessor may be willing to undertake the assessment because it will be time consuming and error in making the assessment may preclude them from being paid for their costs assessment; and (f) a re-determination of the costs assessment will take considerable time, likely in the order of the 12 months it took the original costs assessor.
None of those things are present matters which prevent a fresh costs assessment being made. On the authorities referred to above, that would be sufficient to deny the exercise of the residual discretion to order a taxation under Part 6 of Order 63.
Whilst some of those things (such as the things in (c), (d) and (e)), if they did eventuate, might then be a proper basis upon which to exercise the residual inherent jurisdiction under Part 6 of Order 63, because they would prevent a fresh costs assessment being made, those things have not arisen and may not arise. The highest it has been put is that there is a risk of those things eventuating. The Court cannot give relief in relation to circumstances that have not occurred and might never happen.[14] Nor should the Court presume that a statutory process would not be undertaken lawfully in accordance with the requirements of the statute.
For the above reasons, it is not appropriate in this case to exercise the residual inherent discretion to order that the Clayton Utz invoices be taxed in the Court under Part 6 of Order 63 of the SCRs.
That makes it unnecessary to determine the parties’ arguments regarding whether a taxation under Part 6 of Order 63 of the SCRs requires the filing of a bill of costs in the form prescribed by SCR 63.40.
Costs of these proceedings beyond 6 May 2022
Both parties agree that the appropriate order in relation to costs of these proceedings beyond 6 May 2022 (when an order was made that each party would bear their own costs incurred to that date) is that each party bear their own costs. I agree that that is the appropriate order to be made.
Disposition
The following orders are made.
(1)Orders 4 and 5 of the Orders made on 6 May 2022 are vacated.
(2)Pursuant to s 362(2)(b) of the LPA:
(a)the Court’s decision on the appeal is remitted to a costs assessor other than the third respondent, as agreed by the parties or, failing agreement, to be allocated by the Law Society; and
(b)that other costs assessor is to re-determine the Ceccon parties’ application for a costs assessment according to Part 3.3 of the LPA.
(3)Each party is to bear its own costs.
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[1] Clayton Utz v Ceccon Transport Pty Ltd & Ors [2023] NTSC 76.
[2] See QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15 at [37] per Kiefel CJ and Gageler J, citing Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [6] per Gleeson CJ, McHugh, Gummow and Hayne JJ and the authorities there cited.
[3] In Order 63, the term ‘Taxing Master’ refers to the Associate Judge or the Registrar, or another officer of the Court so directed under SCR 63.01(3) by the Taxing Master, conducting a taxation of costs under Order 63 (SCR 63.01(1)).
[4] See GE Dal Pont, Law of Costs (LexisNexis, 5th ed, 2021), p 15, [4.1], [5.1].
[5] Ibid, [5.53] and the authorities there cited. See also Pryles & Defteros (a firm) v Green (1999) 20 WAR 541 at [22]-[23] per Parker J and the authorities there cited.
[6] See GE Dal Pont, Law of Costs (LexisNexis, 5th ed, 2021), [5.54].
[7] See Symbol Park Lane Ltd v Steggles Palmer (a firm) [1985] 2 All ER 167 at 172 per Goff LJ.
[8] See GE Dal Pont, Law of Costs (LexisNexis, 5th ed, 2021), [5.54].
[9] See DC Pearce & S Argument, Delegated Legislation in Australia (Lexis Nexis, 5th ed, 2017), [19.1], [19.19].
[10] See Symbol Park Lane Ltd v Steggles Palmer (a firm) [1985] 2 All ER 167 at 172 per Goff LJ, citing Storer & Co v Johnson (1890) 15 App Cas 203.
[11] Citing Harrison v Tew [1990] 2 AC 523 at 532 per Lord Lowry.
[12] Symbol Park Lane Ltd v Steggles Palmer (a firm) [1985] 2 All ER 167 at 172 per Goff LJ. See also Re Johnson and Weatherall (1888) 37 Ch D 433; Sutton v Sears [1960] 2 QB 97.
[13] See GE Dal Pont, Law of Costs (LexisNexis, 5th ed, 2021), [5.55].
[14] See University of New South Wales v Moorhouse (1975) 133 CLR 1 at 10 per Gibbs J, cited with approval in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582 per Mason CJ, Dawson, Toohey and Gaudron JJ.
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