Commissioner of Police v Hoffman
[2014] NSWDC 113
•04 June 2014
District Court
New South Wales
Medium Neutral Citation: Commissioner of Police v Hoffman [2014] NSWDC 113 Hearing dates: 17 April 2014, 3 June 2014 Decision date: 04 June 2014 Before: Neilson DCJ Decision: Application for leave to appeal refused.
Catchwords: COSTS - Whether counsel entitled to claim brief on hearing fee where matter settled 10 days prior to hearing date - Whether reasonable to brief counsel on hearing immediately after a date was fixed for hearing - Counsel entitled to charge brief on hearing notwithstanding settlement - Work in substitution may disentitle charging of brief on hearing - Chamber work no substitute for appearance in court Legislation Cited: Legal Profession Act 1987
Legal Profession Reform Act 1993
Legal Profession Act 2004
Police Regulation (Superannuation) Act 1906Cases Cited: Commissioner of Australian and Federal Police v Razzi (1991) 101 ALR 425
Donovan v Miller [1987] VR 221
Gannon v The Commissioner of Police (2004) 1 DDCR 381
Grose v Commissioner of Police [2012] NSWDC 215; (2012) 11 DDCR 192
Klas Pty Ltd v Australian Ophthalmic Supplies Pty Ltd [2007] WADC 79
Levy v Bergseng [2008] NSWSC 294; (2008) 72 NSWLR 178
Murray v The Commissioner of Police [2004] NSWCA 365; (2004) 2 DDCR 31
Page v Commissioner of Police (No. 1) [2012] NSWDC 130; (2012) 10 DDCR 428;
Re Mayer [1947] VLR 363
R v Martiniello [2005] ACTSC 109
Rogers v Commissioner of Police (2005) 2 DDCR 515
Ross v The Commissioner of Police (2009) 7 DDCR 397
Stewart v NSW Police Service (1998) 17 NSWCCR 202
Wide Bay Conservation Council Inc v Burnett Water Pty Ltd (No 9) [2011] FCA 661
Wilkie v Gordian Runoff [2005] NSWSC 873Texts Cited: Professor G E Dal Pont, Law of Costs, (3rd ed, 2013, Lexis Nexis Butterworths)
AG Saddington Esq, Taxation of Costs Between Parties (1919, Law Book Company)
AG Saddington Esq & BK White Esq, Costs (Solicitor and Client), (1947, Law Book Company)Category: Principal judgment Parties: Commissioner of Police (Applicant)
Lawrence William Hoffman (Respondent)Representation: Solicitors
Turks Legal (Plaintiff)
Walter Madden Jenkins (Defendant)
Counsel
Mr M Davies (Plaintiff)
Mr P O’Rourke (Defendant)
File Number(s): 2013/351577 Publication restriction: No
Judgment
Ex tempore
HIS HONOUR: This is an application for leave to appeal pursuant to s 385 of the Legal Profession Act 2004. The only matter in dispute between the parties is whether counsel retained for the present defendant is entitled to claim a "brief on hearing" fee when the application made by the defendant settled ten days prior to the date on which it was fixed for hearing.
Facts
The current defendant, Mr Lawrence William Hoffman, is a former member of the New South Wales Police. He was attested as a probationary constable of police on 31 October 1973 and thereupon became a contributor to the Police Superannuation Fund established by the Police Regulation (Superannuation) Act1906, to which I shall refer hereafter as the Superannuation Act.
On 30 September 2010, Mr Hoffman was certified to be unfit to carry out the duties of his office on account of the infirmities of "chronic rotator cuff of the left shoulder; reconstruction of arthritic carpal bone of the left thumb and chronic post-traumatic stress disorder". That certification was made by the Police Superannuation Advisory Committee (PSAC), the delegate of the SAS Trustee Corporation, under the provisions of the Superannuation Act. As a result of the certification by PSAC, the current plaintiff, the Commissioner of Police, was required to decide whether the suffering by the plaintiff of those infirmities was caused by his having been "hurt on duty", as that term is defined in the Superannuation Act.
The current plaintiff, by his delegate, determined on 14 October 2010 that the suffering by the plaintiff of the first two infirmities was caused by his having been hurt on duty, but decided that the suffering by the plaintiff of "chronic posttraumatic stress disorder" was not caused by his having been hurt on duty. Aggrieved by that decision, the defendant made an application to this Court pursuant to s 21 of the Superannuation Act. The Superannuation Act fixes a six month period from written notification of the decision of the plaintiff in which to bring an application to this Court. That six month time limit cannot be extended by the Court.
On 12 April 2011, the current defendant filed a statement of claim in this Court, which was assigned as required by the Rules to the Special Statutory Compensation List. Mr Hoffman sought that the decision of the Commissioner of Police that his suffering "chronic PTSD" was not caused by his having been hurt on duty be set aside and replaced it by the Court's own decision on that issue. Paragraph 4 of the Mr Hoffman's statement of claim was in the following terms:
"The Plaintiff claims that during the course of the duties [as a member of the New South Wales Police] he contracted a disease of the mind, for which his employment was a substantial contributing factor and which eventually, rendered him unfit for full operational duty.
Particulars
4.1 In or about 1985, the Plaintiff was forced to shoot an escaped prisoner.
4.2 On 7 December 2002, the Plaintiff attended a fatal collision at Kyogle resulting in the death of three juveniles.
4.3 On 20 April 2004, the Plaintiff attended a fatal collision at Kyogle resulting in the death of the elderly parents of a school friend.
4.4 In or about 2005, the Plaintiff attended an address in Casino, where a young female had committed suicide. The Plaintiff tried to revive her until the arrival of paramedics, then drove the paramedics and the victim to Casino Hospital where life was pronounced extinct.
4.5 On 22 April 2005, the Plaintiff was assaulted by a suspect in Canterbury Street, Casino suffering injuries to the left side of his face and soreness to the neck and shoulder.
4.6 On 7 September 2005, the Plaintiff suffered an injury to his left shoulder during the arrest of an offender.
4.7 In or about November 2007, the Plaintiff attended an address on Mortons Gap Road, Casino involving the suicide of a relative whom he knew fairly well.
4.8 In or about November 2007, the Plaintiff was informed of a Local Area Manager that his position was no longer available, and he was offered an administrative position some distance from where he worked and lived at Casino.
These particulars are not exhaustive, and further particulars may be provided prior to [the] hearing."
I am completely unaware as to whether any further particulars were delivered by Mr Hoffman's solicitors to the defendant in those proceedings, the current plaintiff, or the current plaintiff's solicitors.
The current defendant's solicitors, Messrs Walter Madden Jenkins, delivered a brief to counsel on 28 June 2011. The brief had on it what once had been called a "back sheet". The brief was described thus: "Brief to advise and appear on hearing." The brief was delivered to a barrister who is well known to me. Since the current proceedings concern counsel's fees, I shall refer to counsel as merely "ABC" rather than by his name.
ABC is a very experienced member of the junior Bar, or to use the usual oxymoronic terminology of the law, a "senior junior". He appears regularly in this Court and not only in the Special Statutory Compensation List. He also appears regularly in the Industrial Relations Commission of New South Wales, in the Supreme Court, and in the Court of Appeal and without a leader. Two days later on 30 June 2011, counsel sent to his instructing solicitors a "Costs Agreement and Disclosure", as required by the Legal Profession Act2004. Part of that document relates to the method of calculating counsel's fees. The relevant part of the document is this:
"All Courts, Commissions and Tribunals:
(a) Hearings, Arbitrations, Mediations and Motions, including Not Reached and Adjournments and matters settled prior to hearing, fee according to the number of days set aside or actual hearing time, whichever is the greater: $3,500 per day
(b) Mentions, Conferences, Advices, Drafting, other Chamber work, Views (including travelling time) $400 per hour
Where matter is adjourned or vacated prior to the hearing dates, fees may be charged in respect of the diarised time allotted, unless a substitute brief on hearing is obtained by the Barrister to offset the hearing fees lost in respect of the adjourned or vacated hearing dates."
There is no issue before me that the amounts charged by ABC for work actually done or the daily fee for a hearing was reasonable. At the time ABC sent that "Costs Agreement and Disclosure", he spent two hours "plus" reading the brief and two hours providing an advice. I do not know whether the advice was oral or in writing but it was referred to by learned counsel for Mr Hoffman in these proceedings, learned counsel for the defendant, as a "memorandum of advice", which would imply that the advice was in writing.
On 11 July 2011, the current solicitors for the plaintiff filed a defence on behalf of the defendant in the earlier proceedings. In essence, the defence alleged that Mr Hoffman did not suffer any injury for which he would have received compensation under the Workers Compensation Act 1987 "because a notice of injury and claim for compensation had not been made at any time in relation to a psychiatric injury". That was after a general traverse of what was alleged in par 4 of Mr Hoffman's statement of claim.
The plea that I have quoted from the defence is based on the provisions of s 10B(2)(b) of the Superannuation Act. Since that pleading was filed, I have held that it is not open to the Commissioner of Police to raise such a plea, it being only available to the SASTC and not to the Commissioner of Police. See Page v Commissioner of Police (No. 1) [2012] NSWDC 130; (2012) 10 DDCR 428; Grose v Commissioner of Police [2012] NSWDC 215; (2012) 11 DDCR 192.
The matter came before me in a callover of fresh matters in the Special Statutory Compensation List on 14 November 2011. Unfortunately, the Court's file in the earlier proceedings has not been put back before me. It was matter number RJ126/2011. However, exhibit 2 tells me that on 14 November 2011, the plaintiff sought an order adjourning the matter to the December callover "pending advice on acceptance by Defendant". In other words, the then plaintiff's solicitors sought to tell the Court that they wished to have the matter adjourned to a further callover because those acting for the then defendant, in particular, Mr Sam Kennedy of Messrs Turks Legal, were seeking instructions from the defendant to accept the condition of "chronic PTSD" as having been caused by Mr Hoffman's having been hurt on duty. It is highly likely that I readily acceded to that request. The reason for doing so is that a diagnosis of a condition such as PTSD carries with it acceptance of a proposition that it was caused by some external stressor likely to cause PTSD. The relevant case law is Gannon v The Commissioner of Police (2004) 1 DDCR 381 and Murray v The Commissioner of Police [2004] NSWCA 365; (2004) 2 DDCR 31. In Murray, Ashford DCJ held that the plaintiff's PTSD was caused by his being transferred from the Police Dog Squad, but the Court of Appeal set aside that decision on the basis that the medical practitioners, namely, psychiatrists, would not accept that that was the type of stressor likely to cause PTSD. The plaintiff in that case ultimately succeeded on other stressors which were likely to cause PTSD.
On 14 November 2011, the matter was adjourned to the callover to be conducted on 5 December 2011 when the matter again came before me. The order sought by the plaintiff on that occasion was to adjourn the matter to the next callover in February 2012, for the same reason for which it was adjourned on 14 November 2011, "pending advice on acceptance by defendant". I clearly was not prepared to accede to that request and instead set the matter down for hearing on 23 March 2012. I also made certain ancillary orders.
On 13 December 2011, a formal notice issued from the Court to the solicitors for each party advising that the matter had been set down for hearing on Friday 23 March 2012 at 10am in the John Madison Tower. However, there is no dispute that on 5 December 2011, immediately after the callover and the orders that I made on that day, that Messrs Walter Madden Jenkins advised ABC of the date fixed for hearing. The date was clearly entered in counsel's diary, as exhibit 1 shows.
Thereafter, there was a flurry of activity by Mr Hoffman's solicitors to prepare the matter for hearing. For example, on 7 December 2011, arrangements were made by Messrs Walter Madden Jenkins for Mr Hoffman to be examined by Dr Peter Anderson, a psychiatrist. On 14 December 2011, a large number of subpoenas to produce documents were issued and some were returned on 23 January 2012 and others were returned on 6 February 2012. All the documents discovered on subpoena and a copy of Dr Anderson's report were sent to ABC to add to his brief. The back sheet of the brief tells me that ABC read those documents on 8 March 2012 and spent two hours doing so. The current plaintiff does not cavil with the fees charged by ABC for the work done by him on 30 June 2011 or the work done by him on 8 March 2012.
Whilst Mr Hoffman's solicitors were busily preparing the matter for hearing, it would appear that Mr Kennedy of Messrs Turks Legal was trying to settle the proceedings. I use the word "settle" loosely because there are very few avenues which might allow one to do so. In essence, the only way of "settling" Mr Hoffman's case against the present plaintiff was for the present plaintiff to accept that the suffering by Mr Hoffman of chronic PTSD was caused by his having been hurt on duty. On Sunday 11 March 2012 at 7.15pm, Mr Kennedy of Messrs Turks Legal sent an email to Mr Matthew Treharne of Walter Madden Jenkins stating this, "You will be pleased to hear that I have finally received instructions to accept liability for HOD ["hurt on duty"]. I will prepare consent orders shortly." It is a testament to the industry and diligence of current practitioners that Mr Kennedy would be in his office attending to business in the evening of a Sunday.
On the following day, Monday 12 March 2012, at 8.34am, Mr Treharne sent an email to Mr Kennedy acknowledging his earlier email "with thanks". Either on that day, 12 March, or the following day, 13 March, Messrs Walter Madden Jenkins advised ABC that the matter had resolved. ABC sent a letter to his instructing solicitors, bearing date 13 March 2012, returning the brief and enclosing his "tax invoice" which once upon a time, would have been called a memorandum of fees. That memorandum of fees charged for work done on 30 June 2011 and 8 March 2012 for the requisite number of hours at the hourly rate disclosed by counsel on 30 June 2011. It also included a fee for "brief on hearing" of $3,500 and placed against the date of the "brief of hearing" was 13 March 2012. It can be seen, therefore, that the resolution of the matter was notified to Mr Hoffman's solicitors on the morning of Monday 12 March 2012, when the matter was fixed for hearing on Friday 23 March 2012, some 10 or 11 days afterwards.
On 19 March 2012, Mr Treharne sent an email to Mr Kennedy. The substance of the email is this:
"[ABC] for the plaintiff appeared before Quirk J this morning in an unrelated application and she wants to know if it is proceeding or not. [ABC] told her it is not, as far as he is aware, but Quirk J wants confirmation in a phone call to her associate [name and phone number provided] from either you or I [sic]."
Mr Kennedy responded by inviting Mr Treharne to make the requisite telephone call to her Honour's associate. Mr Kennedy prepared consent orders. The fourth of the consent orders was that the defendant was to pay the plaintiff's costs as agreed or assessed. Those consent orders passed under the seal of this Court on Thursday 22 March 2012, the day before the matter had been listed for hearing.
The issue in question
The current plaintiff has objected to counsel for Mr Hoffman charging a brief on hearing when the matter settled either 10 or 11 days prior to the date fixed for hearing.
When legal costs were regulated by the courts, the current plaintiff's argument would have been untenable, and this was frankly conceded by counsel for the plaintiff. However, counsel for the plaintiff alleged that the regime introduced by Act number 7 of 1993, known as the Legal Profession Reform Act 1993, changed the way in which counsel may charge. The Legal Profession Reform Act1993 made amendments to the Legal Profession Act1987, essentially introducing the new scheme for the assessment of costs both on a party/party basis and costs as between solicitor and client, or costs on an indemnity basis. The new provisions commenced on 1 July 1994. The amendments made to the Legal Profession Act1987 have been carried into the Legal Profession Act2004.
The position prior to 1 July 1994
I shall revert to the situation that applied prior to the coming into force of the Legal Profession Reform Act1993. For the first half of the 20th century, the leading authority on costs in this State was AG Saddington Esq. In 1919, his work "Taxation of Costs Between Parties" was published by the Law Book Company. The cover page of that work described Mr Saddington as Deputy Prothonotary and a Taxing Officer of the Supreme Court of New South Wales. In the preface to that work, Mr Saddington alluded to the fact that for over 20 years, he had exercised the office as a Taxing Officer of the Supreme Court of New South Wales. 28 years later, Saddington Esq, together with BK White Esq., wrote a work called "Costs (Solicitor and Client)" which was published by the Law Book Company in 1947. Inter alia, that book contained notes bringing up to date Saddington's work of 1919. The cover page of that work describes Saddington Esq both as a barrister-at-law and as a former Prothonotary of the Supreme Court of this State. On p 463, an updating of the 1919 work contains this matter:
"Once the brief has been delivered, the fact that the case has been settled since delivery, does not affect the right of counsel to the fee marked thereon, nor is the solicitor justified in asking for the return of the fee [Pearce v Tower Manufacturing and Novelty Co. (No. 2) 24 VLR 757]. As a matter of fact, the amount of the fee to be paid in such cases is frequently reduced by counsel, but it depends mainly upon the work he has done and the effect upon his practice of his having accepted the brief."
The same practice, custom or convention can be seen in the decision of Wilcox J in Commissioner of Australian and Federal Police v Razzi (1991) 101 ALR 425. Commencing at 427.45, his Honour said this:
"I should add that, during argument on the claim for solicitor-client costs, counsel for Mrs Razzi made several references to the fact that the hearing had occupied a much lesser period of time than was originally expected. This comment was made almost by way of complaint. Its repetition puzzled me. So I asked counsel to explain the relevance of that matter, commenting that I found it difficult to see that Mrs Razzi was otherwise than advantaged by the shortening of the hearing. Although counsel did not spell out the details, I understood from his reply that some sort of agreement had been made obliging Mrs Razzi to pay 'cancellation fees' in respect of some or all of the time which was originally expected to be needed for the case but which was not in fact required. I gathered that one purpose of the application for solicitor-client costs was to facilitate a claim for those fees.
I do not think that a solicitor-client order would in fact enable recovery of 'cancellation fees'. A solicitor-client costs order enables the recipient of the order to recover the actual costs, reasonably incurred, of all work reasonably required and actually performed in connection with a matter. But it does not extend to fees for work not done.
However, even if there was a basis for recovery of 'cancellation fees', I would require a deal of persuasion ever to make an order which would have the effect of permitting a party to recover such payments from someone else. The charging of 'cancellation fees' by some barristers seems to be a practice of very recent origin. In 21 years at the Bar, from 1963 to 1984, I never heard of such fees being asked. There were, of course, occasions when cases were suddenly adjourned, or when they took less time than had been estimated, so that the barristers briefed in the matter found themselves unexpectedly out of court. Very often they would have refused other work because of the case and its estimated duration. But, as I understood the situation, barristers generally accepted that any financial loss caused by such circumstances was to be borne by them. Any disadvantage had to be balanced against the advantage conferred by the rule which permits barristers to charge a full fee on a matter settled after delivery of the brief but before any hearing. This approach was fair."
I should add that the practice of solicitors' marking a fee on a brief was almost obsolete at the time I commenced practice in 1976 as a solicitor. By the time I was called to the Bar in 1984, the practice was, in my experience, obsolete. However, that practice or the desuetude did not affect the principle that counsel who had a brief delivered to him for hearing was entitled to a brief on hearing fee if the matter settled prior to the date on which it was fixed for hearing. The only real issue in the regime antecedent to the "reforms" introduced by the Legal Profession Reform Act1993 was whether a brief on hearing had been prematurely delivered.
The relevant cases to which I have been referred include Re Mayer [1947] VLR 363, a decision of O'Bryan J, Donovan v Miller [1987] VR 221, a decision of a Full Bench of the Supreme Court of Victoria, comprising Young CJ and King and Beach JJ, and Klas Pty Ltd v Australian Ophthalmic Supplies Pty Ltd [2007] WADC 79, a decision of a deputy registrar of the Western Australian District Court. In Re Mayer, the Taxing Master reduced the fees payable to senior counsel because the matter had settled early. His Honour held that the Taxing Master was wrong in law for not allowing the full fee marked on the brief for senior counsel for the caveators and caveatrices in that probate matter.
Donovan v Miller concerned a suggestion that the brief to counsel for a plaintiff had been prematurely delivered. The court delivered a joint judgment. The Registrar of the County Court had disallowed the amount paid to counsel on brief. There was an appeal from the Registrar to a Judge of the County Court, Walsh J. Walsh J held that the Registrar of the County Court was in error and that fees were properly payable to counsel. The aggrieved defendant in the earlier proceedings then appealed to the Supreme Court. At 224, their Honours said this:
"His Honour relied upon some observations of Madden CJ in International Financial Society v Smith (1896) 22 VLR 114, at p. 119 where the Chief Justice had said that in his view briefs could not be too soon prepared. Counsel before us suggested that the Chief Justice was there drawing a distinction between the preparation of a brief and its delivery to counsel. We see no basis for such a distinction and although we do not wish to encourage the premature delivery of briefs we wish to emphasise that the proper conduct of litigation in the interests of a party requires a solicitor to prepare a brief to counsel in good time and to deliver a brief to counsel in an appropriate case in good time. What is 'good time' will of course vary from case to case but it must be governed principally by consideration of the interests of the solicitor's client. To borrow the language of the headnote in Peile v Nobel (Australasia) Pty Ltd [1966] VR 433, what has to be considered are the individual features of each case, not merely what kind of a case it is: see at pp. 437-8, per Starke J. In determining whether a step taken by a solicitor in an action has been taken prematurely the test to be applied is: Would a reasonable and prudent, but not overcautious, solicitor in all the circumstances consider that the time for doing the work has arrived?"
Their Honours concluded that there was no reason shown why they should interfere in Judge Walsh's decision.
In Klas Pty Ltd v Australian Ophthalmic Supplies Pty Ltd, a Deputy Registrar, who was the Taxing Officer, pointed out that there was an objection concerning counsel's fee on brief. He continued thus:
"The objection is that I failed to properly exercise my discretion by allowing $8,572 for this item when there was no substantial trial. Counsel had mastered his brief and attended the Court to conduct the trial. The fact that the matter was then settled does not strike me as a basis to deprive the plaintiff from the costs properly payable to counsel for his work undertaken mastering the brief. I do not accept that the lack of a substantial trial necessarily precludes a recovery for the work undertaken for mastery of [the] brief when clearly that has occurred."
The current plaintiff takes a little comfort from what was observed by the Deputy Registrar Hewitt of the Western Australian County Court, but the fact remains that traditionally, a brief on hearing encompassed time spent by counsel reading the brief and preparing for trial. For example, in Professor Dal Pont's work "Law of Costs", third edition 2013, the learned author commences his discussion of counsel's fees thus:
"17.47 A brief to appear obligates counsel to attend a court or tribunal to represent a client's interests and the fee on brief rewards him or her for doing so. The Federal Court Rules, in this context, disallow on a party/party taxation counsel's fee on hearing if counsel was not present at the hearing for a substantial amount of the relevant period or did not give substantial assistance in the conduct of the proceeding. A similar restriction applies under the Family Law Rules, except in a case heard by the full Family Court.
17.48 The traditional basis for charging counsel's fees in respect of a court hearing has been via a brief fee and refreshers, and counsel's fees has been taxed as between party and party on this basis. As preparation for trial is incidental to the central task for which counsel's fee is paid, the brief fee is 'taken to include a good deal of time spent on reading facts or law in preparation for the trial'. It covers preparation up to at least a substantial part of the day and night before the hearing, and for time spent before the first refresher, which usually commences after the first day of the trial. The extent of the allowance for preparation in the brief fee is usually reflected in the difference between it and a refresher. A party who seeks a departure from that traditional basis, it has been said, carries the onus of satisfying the taxing officer that the traditional method of fee marking could not reasonably have been followed in all the circumstances of the case.
17.49 Although a taxing officer has a discretion to allow a separate fee for preparation as to facts or law or both, the exercise of this discretion was rarely regarded as necessary or proper for the attainment of justice. Only matters of great complexity or voluminous documentation would be justified, and only when a loading of the brief fee (and thus the refreshers) for the preparation component was, at the time the fees fell or at least the preparation fee fell naturally to be marked, likely to result in overall fees substantially too high or too low. The same applied regarding reading fees, which would be reserved for cases of great complexity or very voluminous material."
Later, the Professor went on to observe this:
"17.50 Yet cases in which it is proper to allow preparation fees at a daily rate on party/party taxation are likely more common, more numerous and arguably less exceptional in modern times. Legal practice has witnessed the emergence of new and complex work, and even established areas of practice have witnessed litigation on a scale previously unprecedented, with attendant complexity. The modern tendency is for counsel to charge a flat fee on a daily basis for both preparation and court work. The approach to taxation must take into account modern practice. There are various instances of judges allowing hourly or flat daily fees in taxing counsel's fees, and are an option identified as a basis for taxation in the National Guide to Counsel Fees promulgated by the Federal Court. In New South Wales, counsel's fees are assessed according to whether they are fair and reasonable, which in turn is related to the market for legal services, and so brief fees and refreshers have no continuing role for this purpose."
Paragraph [17.53] of the Professor's work discusses the premature delivery of briefs.
In the current case, it could not be said the brief to counsel on hearing was delivered prematurely. When a court fixes a hearing date, it is incumbent upon a solicitor to select counsel and to retain him for the hearing date fixed by the court. Here, it must be recalled, that a "brief to advise and appear on hearing" was delivered to ABC prior to the filing of a defence. If, instead of filing a defence, the solicitors for the current plaintiff consented to the relief sought, then it could not be argued by Walter Madden Jenkins that their delivery of a brief to ABC was appropriate. If, at either of the callovers on 14 November 2011 or 5 December 2011, the Court was advised that the matter had resolved, it would be equally unarguable that a brief on hearing had been prematurely delivered to ABC. However, once a hearing date was fixed, it was appropriate for Mr Hoffman's solicitors to retain counsel to appear at the hearing, and therefore to deliver a brief on hearing. Learned counsel for the current defendant, Mr O'Rourke, readily agreed with those propositions which I put to him.
The position since 1 July 1994
As I stated earlier, were legal costs still governed by the regime that applied prior to 1 July 1994, the current plaintiff's argument would be untenable. What has changed? The plaintiff's arguments rest upon an interpretation of s 364 of the Legal Profession Act2004. Section 364 deals with the assessment of a costs order made by a court or tribunal. The first two subsections are these:
"(1) In conducting an assessment of legal costs payable as a result of an order made by a court or tribunal, the costs assessor must consider:
(a) whether or not it was reasonable to carry out the work to which the costs relate, and
(b) whether or not the work was carried out in a reasonable manner, and
(c) what is a fair and reasonable amount of costs for the work concerned.
(2) In considering what is a fair and reasonable amount of legal costs, a costs assessor may have regard to any or all of the following matters:
(a) the skill, labour and responsibility displayed on the part of the Australian legal practitioner or Australian-registered foreign lawyer responsible for the matter,
(b) the complexity, novelty or difficulty of the matter,
(c) the quality of the work done and whether the level of expertise was appropriate to the nature of the work done,
(d) the place where and circumstances in which the legal services were provided,
(e) the time within which the work was required to be done,
(f) the outcome of the matter."
The plaintiff's submissions about the proper interpretation of s 364 rely largely on the use in subsection (1) of a past tense, indicating that the work has had to be carried out before the costs involved in it can be recovered. Therefore, the argument goes, since the matter settled 10 or 11 days prior to the date fixed for hearing, counsel did not earn the brief fee because there was no actual appearance involved or the usual preparation generally carried out on the afternoon or evening before a matter is listed for hearing or on the morning of the day on which it was listed for hearing when counsel would read or re-read the brief, familiarise himself with the facts and get the matter up for hearing.
Cancellation fees
That argument is reinforced in the plaintiff's submissions by the injunctions against "cancellation fees", which can be found in authorities such as Razzi and others to which I shall, in due course, turn. Counsel for the plaintiff would not concede that there might be different types of fees which could be called "cancellation fees" or that they might be dealt with in a different fashion. It appeared to me that it was necessary for counsel for the plaintiff to make that submission because otherwise he might be walking into a pool of quicksand.
There are a number of instances in which there could be things that might generically be called "cancellation fees". The first which can be clearly identified in the decision of Razzi itself, where Ms Razzi had been required to pay extra fees to counsel where the hearing did not last as long as it was expected to. Another sort of "cancellation fee" arises where a hearing is adjourned for one reason or another. For example, in Levy v Bergseng [2008] NSWSC 294; (2008) 72 NSWLR 178, the Supreme Court listed a matter for hearing for six weeks commencing on 7 February 2005. That order was made on 10 September 2004. On the date in which the hearing date was fixed, learned senior counsel for the litigant wrote to his instructing solicitors in the following terms:
"I confirm that I have set aside six weeks for this trial i.e. between Monday 7 February 2005 and Friday 18 March 2005.
I need to clarify with you the question of cancellation fees because this is a large block of professional time to set aside and there are other cases being listed in this timeframe and it is not my practice to 'double book'.
I have set aside the entire time on the assumption that the case will proceed. Consistent with this fixture I will refuse offers of other briefs for hearing in that period.
My fee disclosure already provides for cancellation fees in respect of the time set aside for the trial. If the case settles before the due date I do not propose to render fees in respect of the whole period set aside but I will do so according to a graduated scale. What I propose is..."
On 22 November 2004, an order was made vacating the hearing that was to have commenced on 7 February 2005. Later, the Supreme Court made orders for the taking of evidence in both London and Athens. The dispute before Rothman J concerned cancellation fees charged by learned senior counsel for the litigant. Commencing at [92], his Honour pointed out that there was no doubt that, according to the second and third costs agreements entered into between Mr Levy, as he then was, and his instructing solicitors MBP, that Mr Levy was entitled to render cancellation fees of some kind in certain circumstances. His Honour then pointed out that MBP relied on the dictum of Wilcox J in Razzi, which I have already quoted, continued:
"94 There are like sentiments expressed by the Federal Court (Einfeld J) in Stefanou v Fairfield Chase Pty Ltd, (unreported, 10 December 1993). See also R v Martiniello [2005] ACTSC 109, per Connolly J.
95 It would be with great reluctance that I would depart from any statement of principle of Wilcox J. However, it must be said that much has changed in the conduct of a barrister's practice from the period ending in the first half of the 1980's on which his Honour's experience was based. First, it was a 21-year period during which the level of specialisation at the Bar was not as manifest as is the case nowadays. Secondly, while it is true that a significant number of barristers resisted (either on their own account or at the urging of their instructing solicitors) demanding cancellation fees, it is a not uncommon practice.
96 Further, and perhaps more relevantly, this matter deals with the payment of cancellation fees by agreement, not the Court ordering one party to pay another party's fees, including cancellation fees, in circumstances where the party who is being ordered to pay costs has had no say in the level of those fees or the method of their calculation. In any event, such issues go to the reasonableness of the fee not whether it is capable of being rendered."
In the current case, as I have already pointed out, there is no suggestion that the level of fee charged by ABC on brief was unreasonable. At [111], Rothman J said this:
"Nothing in this judgment should be taken as a general proposition that all counsel in all cases can reasonably and justly charge cancellation fees. In most cases, and for most counsel, cancellation fees would be unjustifiable. This judgment deals only with this appeal, relating as it does to senior counsel engaged 'on spec' in particularly specialised work for which the lead time is lengthy and during which he has, in fact, foregone other paid court work."
In Martiniello, to which his Honour referred, Connolly J stayed criminal proceedings. The principle of costs at common law in the criminal jurisdiction is that the Crown neither pays nor seeks costs. There was no relevant legislation in the ACT concerning costs in criminal cases. The background in Martiniello is contained in [2]:
"The matter arose when on the day that had been set down for the first day of a two week trial the Crown made an application to adjourn the trial on two bases, one that a police who would be required to give evidence was unavailable and secondly that there was certain evidence that was not available to the Crown. It emerged from the affidavit material quite properly put before the court by the Crown that the Crown had been aware of the evidential gap for some months and I set out the circumstances of that in some detail in that published decision."
At [4] his Honour said this:
"I was concerned in this matter that there was significant unfairness to the accused who had retained senior and junior counsel for some time to prepare what was clearly going to be a complex commercial criminal trial in the sense that he was facing trial on 11 counts of improperly using a computer for gain but had originally been committed on the basis of theft. There were quite extensive delays in getting the matter from committal to the Supreme Court for trial which I accept that were proper and did not criticise on the basis of the clear complexity of the matter."
On the first day that the matter had been listed for trial, his Honour granted a stay of proceedings until the Crown paid the "reasonable costs to be agreed or taxed that the defence has incurred by reason of the adjournment". It transpired that learned senior counsel for the accused charged a cancellation fee for the full ten days on which the matter had been listed for trial. At [9], his Honour said this:
"The threshold question is whether cancellation fees are properly to be required to be paid pursuant to the former cost order that I made. My short answer is that I do not think that they are. There is no recognition of cancellation fees in the rules of this court and I'm not aware of any practice in the civil side of this court where cancellation fees are generally regarded as appropriately caught within a general form of costs order."
In [15], Connolly J said: "It was certainly not in my contemplation there that that was a full solicitor/client costs order for the entirety of what would have been the trial costs." At [18], his Honour declined to make an order pursuant to "a cancellation fee basis" but stood the matter over so that the parties could negotiate costs and, in default of their being unable to negotiate costs to allow the Registrar to make an appropriate determination. One would have thought that both senior and junior counsel for the accused would be entitled to at least their costs of the first day that the matter had been listed for trial when it was, in fact, adjourned. Such cancellation fees were in respect of an adjournment, rather than because a trial had not taken place, rather than because a matter had settled, or where the hearing was for a lesser period of time than actually was needed.
The modern practice of counsel charging an hourly rate for work done in chambers and flat fees for each day of hearing continues to draw criticism. In that regard, one ought consider the decision of Logan J of the Federal Court in Wide Bay Conservation Council Inc v Burnett Water Pty Ltd (No 9) [2011] FCA 661. At [95], his Honour said this:
"Cautionary, if not deprecatory statements with respect to the practice of time charging by counsel and solicitors are both legion and not confined to the present generation of the judiciary."
Between [96] and [101], his Honour sets out many of the relevant dicta criticising the practice of counsel charging hourly rates for preparation and fixed fees for each day of hearing of a trial, which I need not bother citing.
However, I cannot accede to the proposition that the fee charged by ABC on brief was a "cancellation fee", as ABC was entitled to charge for that fee under the law that existed prior to 1 July 1994 when cancellation fees were not in general recognised in any jurisdiction. It appears to me that "cancellation fees" is an appropriate appellation where counsel charges for time set aside for a hearing which has been adjourned or for time set aside when a case does not last as long as was expected. However, a court has a discretion to allow such fees if it is considered appropriate. One such exercise of the court's discretion in the Special Statutory Compensation List in this Court is Ross v The Commissioner of Police (2009) 7 DDCR 397.
Decision of the Costs Assessor
An application of the current nature can only arise after the process of assessment of the current defendant's costs. The issue with which I am now dealing was dealt with by the costs assessor MW Robinson Esq, a barrister. At the foot of p 2 of his reasons, Mr Robinson said this:
"In respect of counsel's fees, 3 pages of general submissions were devoted to the objection to what was described by the costs respondent [the current plaintiff] as a 'cancellation fee' of [$3,500] plus GST. Other objections were made to time taken for work in preparation of an advice, which in my view was fair and reasonable. However, in relation to the 'cancellation fee', the Costs Respondent does not seem to be really disputing that a brief on hearing was delivered to counsel for which item 94 is the claim, but rather, since the solicitor and counsel had ten days' notice prior to the hearing that the matter was resolved, 'it is inconceivable in such circumstances for counsel to charge any brief fees'. The submission continues that the plaintiff's solicitor should have negotiated that counsel not be entitled to charge the fee claimed at item 94, or if it claimed it to reduce it in some manner 'on a sliding scale.'
None of the authorities cited by the costs respondent directly support this proposition, and even Commissioner of Australian Federal Police v Razzi..., as the applicant's response points out, is against it in the case of a finding that it was a brief on hearing fee, which I find. I accept that it is pointed out in correspondence that a barrister in fact did not have other work on the day of hearing."
I should merely add that it has been established before me that ABC did not obtain other court work for 23 March 2012.
The decision of the Review Panel
The current plaintiff then sought review by a review panel. The Panel comprised two solicitors, Mr Terence Leland Stern and Mr Christopher Phillip Wall. The Review Panel referred to the decision in Levy v Bergseng and also the decision of McDougall J in Wilkie v Gordian Runoff [2005] NSWSC 873. The Review Panel said this at [7.3]:
"Rothman J then proceeded to note that much had changed since Wilcox J's time at the Bar and cancellation fees had become a not uncommon practice [95]. Further, Rothman J noted that he was dealing with a practitioner/practitioner agreement not a court order situation. His Honour referred to the 'more modern view' in Wilkie v Gordian Runoff...where McDougall J observed that where counsel was retained to work exclusively on a matter, other offers for work were rejected and, even with capable counsel, it wasn't always possible to find other work in replacement if a retainer came to an end abruptly, unexpectedly and early, thus it had become common for counsel to require an agreement to pay a cancellation fee ([17] in Wilkie-[98] in Levy)."
The Panel then went on to quote other observations by Rothman J in Levy v Bergseng. At [7.8], the Panel said this:
"The review panel considers:
7.8.1 Razzi is not authority for the proposition that a brief on hearing fee cannot be recovered from the unsuccessful party pursuant to a court order for the payment of costs;
7.8.2 Levy, though a practitioner/practitioner case, is obiter for the proposition that a brief on hearing fee (as with a cancellation fee) can be classified as legal costs, notwithstanding that no work in fact was done, the matter having been resolved prior to hearing;
7.8.3 Master Malpass (as he then was) dismissed a summons seeking to challenge a determination of a costs assessor who had allowed $2900 for what amounted to one day brief on hearing fee in a situation where the trial judge had ordered the plaintiff to pay the defendant's costs, thrown away in consequence of the vacation of a hearing date. The Master said the appeal was misconceived and hopeless (Vasil Totev v Michael Sfar [2005] NSWSC 363)."
I observe that when I was at the Bar, if an order for costs was made on the basis of an adjournment, counsel generally did not charge a full brief fee but merely a full refresher. The Panel ended their reasons thus:
"7.10 The panel members agree on the appropriate principles. They differ on the application of those principles to this particular case.
7.11 One panel member concludes that in the context of the settlement of the matter ten days before a hearing fixed four months previously, it is fair and reasonable that a brief on hearing fee be paid to counsel and it is fair and reasonable that the unsuccessful party pays such an amount in the scope of recovery of party/party costs.
7.12 The other panel member draws an inference that the last work done by the barrister was that referred to on 8 March 2012 and the charges on an hourly rate basis are likely to have comprised the whole of the work that the barrister did. The work was not complex or specialised. The hearing did not involve setting aside a lengthy period. The likelihood is that a barrister would have done chamber work on what was to have been the day of the hearing and charged the barrister's hourly rate. In the opinion of that panel member, a charge of $3,500 plus GST is not fair and reasonable in the circumstances.
7.13 Where panel members are unable to agree on a determination, the panel must affirm the decision of the Assessor (subsection 375(4) of the Act). Thus the panel affirms the determination of the original Assessor."
The current plaintiff, like one of the assessors, has submitted that the work that ABC was briefed to perform was neither complex or specialised. Indeed, in his written submissions, counsel for the plaintiff said:
"However, hurt on duty proceedings are less complex than workers compensation proceedings, because the court does not have to assess the degree or incapacity of impairment, nor the quantum of compensation. The court has power only to confirm, or set aside and replace the administrative decision of the Commissioner of Police based on the court's view of causation."
Such a submission could only be made by someone who has never appeared in either the Special Statutory Compensation List or in the Compensation Court of New South Wales. This is the 20th year which I have been a judge. During the first nine years and four months of my judicial career, I sat as a judge of the Compensation Court, hearing ordinary workers compensation matters and matters that are now assigned either to the Special Statutory Compensation List or to the Coal Miners Workers Compensation List. Ordinary workers compensation matters are much easier to resolve than applications under the Superannuation Act, whether the Commissioner of Police was the respondent/defendant or the SAS Trustee Corporation was the respondent/defendant.
When looking at the statement of claim filed on behalf of Mr Hoffman by Walter Madden Jenkins on 12 April 2011, one can see certain areas of law which need to be considered. For example, learning of the death of a fellow police officer or relative or friend may or may not amount to a compensable event. There are a number of authorities concerning such an issue, for example, Rogers v Commissioner of Police (2005) 2 DDCR 515, and one can go back to the decision in Stewart v NSW Police Service (1998) 17 NSWCCR 202. In Stewart, who was a civilian employee of the Commissioner of Police and not a serving police officer, learned of the death of a fellow worker due to a non-compensable illness and became depressed because of that. In that case, it was held that the employment was not a substantial contributing factor to the worker's psychiatric reaction to learning of the death of the former work colleague. In par 4.3 and 4.7 of the statement of claim, which I have cited above, there is reference to the deaths of the elderly parents of a school friend of the plaintiff's, and to the suicide of a relative whom the plaintiff knew very well. The real issue for determination in such cases is whether the plaintiff learned of the tragedies in the course of his employment and if so, whether, for a relevant psychiatric injury, the employment was a substantial contributing factor.
Furthermore, one can see from paragraph 4.8 of the statement of claim that the issue of the plaintiff's being transferred might raise the operation of s 11A of the Workers Compensation Act1987, but of course, one would then have to consider the ramifications of that with what fell from the Court of Appeal in Murray v The Commissioner of Police, which I have already cited. The work is specialised and in some ways arcane.
Decision
The substance of the plaintiff's submissions about the proper interpretation of s 364 can be approached in one of two ways. What was being assessed was the bill of costs submitted by the defendant's solicitor to the plaintiff. Counsel's fees were claimed as a disbursement. Looking at the matter from a solicitor's point of view, was it reasonable to deliver a brief on hearing to counsel after the court had fixed a hearing date? The answer to that is yes, it must be so. The solicitor for the defendant could not delay briefing appropriate counsel. The number of counsel with expertise in the field is not particularly large. ABC sometimes appears for plaintiffs. ABC sometimes appears for defendants. Were he not retained by the defendant's solicitors, he might have been retained by the plaintiff's solicitors. Were he not retained to appear for Mr Hoffman, he might have been retained to appear in another matter in the Special Statutory Compensation List that was due to be heard on 23 March 2012. In general, there are two judges who sit each day of each week during term in the Special Statutory Compensation List, so that for example, one judge would be hearing one list, list A, and another judge would be hearing the other list, list B. Equally, counsel could be retained to appear in another jurisdiction or even in the Court of Appeal. It is appropriate that counsel be retained after a hearing date is fixed in order that he be available to represent the current defendant at the hearing. If a solicitor delayed to, say, the Monday before the Friday hearing date or even the Friday before the hearing date fixed, experienced counsel in the field might not be available, and no barrister with expertise in workers compensation matters might be any longer available. For example, many members of the Bar who practised in the Compensation Court have retired or have been appointed as arbitrators, senior arbitrators or deputy presidents of the Workers Compensation Commission. Retaining experienced counsel is something very properly done by the plaintiff's solicitor. It is clear that the defendant's solicitor was also relying upon ABC to advise and if, for example, when he perused the documents produced on subpoena and the further report of Dr Anderson, counsel may have discovered something which might have caused him to issue a further advice on evidence, but that clearly did not occur in the current case. In other words, the retention of counsel by the defendant's solicitors to appear for the defendant at the hearing scheduled on 23 March 2012 was fair and reasonable, in my view.
The other way on which it can be looked at is from the barrister's point of view. Barristers have a number of obligations. From the Court's point of view, the barrister's primary obligation is to turn up when the matter in which he is briefed is listed for hearing. One can have regard to the current Bar Rules published on 6 January 2013 because there is little dissimilarity between them and those that were applicable to ABC during the relevant period. Barrister's work is defined to include appearing as an advocate and preparing to appear as an advocate. There is then the well-known cab-rank principle. Current barristers rule 21 is in the following terms:
"A barrister must accept a brief from a solicitor to appear before a court in a field in which the barrister practises or professes to practise if:
(a) the brief is within the barrister's capacity, skill and experience;
(b) the barrister would be available to work as a barrister when the brief would require the barrister to appear or to prepare, and the barrister is not already committed to other professional or personal engagements which may, as a real possibility, prevent the barrister from being able to advance a client's interests to the best of the barrister's skill and diligence;
(c) the fee offered on the brief is acceptable to the barrister; and
(d) the barrister is not obliged or permitted to refuse the brief under Rules 95, 97, 98 or 99."
In other words, if ABC had not been retained for the hearing on 23 March immediately after the callover on 5 December 2011, he would be obliged under the cab-rank rule to accept other work if it became available to him and fell within the cab-rank principle. Other relevant rules, in my view, are rr 56 and 57 which deal with the efficient administration of justice, and r 99(b) and rr 102, 103 and 105. Essentially, once ABC was retained, he could not return the brief and leave the lay client Mr Hoffman "in the lurch", so to speak, that is, leaving him without adequate representation for the hearing on the date fixed for the hearing.
I reject the contention that ABC did not do any relevant "work" which entitled him to charge a fee of brief. He held himself available at all material times until the matter was settled, until at least 13 March 2012 when he returned the brief, having advised that the matter had been resolved. As a result of holding himself available for Mr Hoffman during that period, he was entitled to and indeed required to refuse other work which would have interfered with his ability to represent Mr Hoffman on 23 March 2012. Furthermore, he held his experience and expertise ready for the benefit of Mr Hoffman. The greater the expertise and experience, the less time it takes to prepare a brief on hearing. ABC knows the area of the law here involved in great detail. He would not have to "work it out" as anyone would need to, who was not experienced in the field. He brought that experience and expertise to what he was required to do for Mr Hoffman and held it available to Mr Hoffman until the present plaintiff decided to concede the relief sought by the current defendant. The submission, if I may use a simile, is one that was sometimes met in the workers compensation field where it was argued that a worker whose periodic or other compensable journey was interrupted by having to wait, was not entitled to compensation if injured during the interruption. There was a difference, of course, between an interruption caused by the worker himself and some interruption in the journey done for reasons extraneous to the worker. For example, a worker who caught a bus to a bus stop and then had to wait to catch a different bus, was travelling, even though he was sitting on a chair at a bus stop. A person was still travelling, albeit that he was standing at a railway station waiting for the inevitably delayed New South Wales train to arrive at the station. A person was still travelling if his car broke down and he had to wait for the NRMA to attend to get it started for him, or for some other repairman to turn up to fix the car so that he could continue his journey. The principle, of course, was that they also travelled who waited.
The administration of justice in this State could collapse if barristers who were retained for a hearing in advance of the hearing date were not entitled to charge for leaving aside the time that they did for a hearing which ultimately never takes place because the matter is settled. The logical outcome of the plaintiff's argument to me is that if the matter settled two days before, three days before, four days before, five days before, six days before (et cetera) the hearing, counsel is not entitled to charge any brief fee. The logical outcome of the submission was that only if counsel actually embarked on preparing the matter for hearing, for example, after 4pm on the day before the hearing was due to commence, would he be entitled to charge any brief fee. Indeed, logically in the current case, if counsel were charging preparation fees, such as a reading fee in addition to the brief on hearing fee, even if the matter settled at 5pm on the day before, counsel would not be entitled to any brief fee. Practice at the Bar would radically alter as those who take longer to prepare cases because of a lack of expertise or experience would be entitled to charge more than counsel with expertise and experience who did not need as long to prepare a matter for hearing. That would not be in the public interest at all.
The other matter which I should advert to is that no reliance was made by either counsel before me on any secondary aids to statutory interpretation, such as any second reading speech or explanatory note or the like, to suggest that the principles relating to the assessment of counsel's fees were to be radically altered by the amendments enacted by the Legal Profession Reform Act1993. Indeed, such references as can be found in the decided cases clearly point in the direction that one of the principles involved was to ensure that more be recovered by litigants than had been the case under the regime in force prior to the commencement of the Legal Profession Reform Act1993; see for example, Attorney General (NSW) v Kennedy Miller Television Pty Ltd (1998) 43 NSWLR 729 per Priestley JA at pp730-731.
In my view, ABC was entitled to charge a fee for a brief on hearing when the matter settled when it did. The only matter which might have disentitled ABC to charge that fee would have been other court work which he might have found for 23 March 2012. If, for example, he picked up another brief to appear on hearing in this Court, either in the Special Statutory Compensation List or the Coal Miners Workers Compensation List or the ordinary civil list, or had found work in the Court of Appeal or the Industrial Relations Commission, I could well accept that he was not entitled to charge for the time he set aside for this matter, because in essence, the time was not set aside but was spent earning remuneration by appearing in court. It is not to the point that counsel may have been able to do some chamber work on 23 March 2012. Counsel get used to appearing in court and doing their chamber work before going to court or after leaving court and for many years (as when I was at the Bar) working 18 hours a day, six days a week.
The other point I should simply mention is this. On the argument advanced on behalf of the plaintiff, being an argument based on statutory interpretation, the plaintiff did not have to seek leave to appeal because he had an appeal as of right. Perhaps the fact that the appellant only sought leave to appeal was an acknowledgement that no true error of law had been made by the Costs Review Panel in confirming the decision of the costs assessor.
For those reasons, leave to appeal is refused. I order the plaintiff to pay the defendant's costs of the application.
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Decision last updated: 24 July 2014
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