Cosmetic Surgery Advisory Centre (of Australia) P/L v Hawthorn Cuppaidge and Badgery
[2011] QMC 33
•18 March 2011
MAGISTRATES COURTS OF QUEENSLAND
CITATION:
Cosmetic Surgery Advisory Centre (of Australia) P/L v Hawthorn Cuppaidge & Badgery [2011] QMC 33
PARTIES:
COSMETIC SURGERY ADVISORY CENTRE (OF AUSTRALIA) PTY LTD
(applicant)
v
HAWTHORN CUPPAIDGE & BADGERY
(respondent)
FILE NO/S:
M5204/09
DIVISION:
Magistrates Courts
PROCEEDING:
Application to set aside costs assessment
ORIGINATING COURT:
Magistrates Court at Brisbane
DELIVERED ON:
18 March 2011
DELIVERED AT:
Brisbane
HEARING DATE:
16 March 2011
MAGISTRATE:
Springer BL
ORDER:
(1) Pursuant to Rule 742 of the Uniform Civil Procedure Rules, the decision of the costs assessor contained in the certificate of assessment dated 13 November 2010 is set aside.
(2) The question of costs (including the costs of the assessment) is yet to be determined.
CATCHWORDS:
LEGAL PRACTITIONERS – COSTS – costs assessment - non-associated third party payer - whether the amount claimed is fair and reasonable in the circumstances
Uniform Civil Procedures Rules 1999, r 742(6)
Legal Profession Act 2007, s 341(3)
Boyce v McIntyre [2008] NSWSC 1218
Boyce v McIntyre [2009] NSWCA 185
COUNSEL:
Taylor for applicant
Challon for respondent
SOLICITORS:
Toogoods for applicant
Respondent appeared on own behalf
INTRODUCTION
For ease of reference in these reasons I shall refer to the Applicant in the originating application, Cosmetic Surgery and Advisory Centre (of Australia) Pty Ltd, as “CSA” and to Hawthorn Cuppaidge & Badgery who is the respondent to the originating application in this proceeding as “HCB”.
In 2008 CSA was the lessee of premises from a client of HCB. The leased premises are at Suite 8, Level 2, 35 Astor Terrace, Spring Hill. CSA wanted to assign the lease which it held to a company Synergetic Engineering Pty Ltd (the new tenant). Work was performed by HCB in their role as solicitors for the landlord in relation to the assignment to the new tenant and a tax invoice was rendered by HCB to CSA and was paid.
There is now a dispute about the quantum of those fees, as a result of which on 8 May 2009 the CSA filed an originating application seeking the assessment of legal costs as included in an invoice rendered by HCB, dated 12 December 2008. The fees were paid by the Applicant on 17 December 2008. The amount of the invoice was $5,855.73 including disbursements and GST.
It was a condition of the Deed effecting the assignment that the ‘existing tenant’ (being CSA) would pay the landlord’s legal costs “on a full indemnity basis”.[1]
[1] Clause 8.1 of the Deed of Assignment states:
The existing Tenant must, on demand and before the Assignment Time, pay or procure to be paid to the Landlord the Landlord’s costs in relation to this deed and with the issue as to whether to consent to the assignment of the Existing Tenant’s interest in the Lease including, if required by law, stamping and registering this deed as well as any deed varying the Lease to give effect to Clause 12 of this deed, and all the Landlord’s legal costs on a full indemnity basis. In addition, the Landlord’s Mortgagee’s consent fees shall also be payable by the Existing Tenant.
In June 2009 HCB and CSA consented to the appointment of James McLellan to carry out the assessment of costs. The assessment was carried out and a certificate from the Costs Assessor was prepared and filed.
Now HCB by application filed 21 December 2010 apply to the Court for orders that the Costs Assessor’s Certificate of Assessment dated 13 November 2010 be set aside pursuant to Rule 742(6) of the Uniform Civil Procedures Rules 1999[2].
[2] That Rule is set out in Appendix A to these reasons.
There was a submission on behalf of CSA that HCB’s application did not comply with Rule 742, which requires an application for review to be filed within 14 days after a party receives reasons, where those have been requested under Rule 738. That occurred here, where the reasons were received by HCB on 7 December 2010 and the application for review was filed 21 December 2010. The submission was that the application did not state “specific and concise grounds for objecting to the certificate” I accept that the application on its face does not comply with that Rule. However, the affidavit of Peter Challen sworn 21 December 2010 makes plain the basis on which the application is brought, such that any omission to include the grounds for objecting should be treated as an irregularity. There is nothing to suggest that CSA suffered any prejudice as a result of the form of the application.
The issues that I have to determine are:
1.whether I should review the decision set out in the Certificate of Assessment and if I do so, to decide whether to vary or set aside the decision
2.if I decide to vary or set aside the decision, what decision should be made in its place?
I clarified with Mr Challen representing HCB in the application as to whether, if I acceded to his request, he wished me to proceed to exercise the powers available on a review, or to simply set aside the assessor’s certificate. I understood him to indicate to the Court that he wished the review to take place as it was in his submission within the ability of the Court to do so on the basis of the material filed. That approach differed from the written submissions that were provided.
Mr Taylor of Toogoods Solicitors representing CSA submitted that the current position should be maintained and that the Certificate of Assessment be not set aside.
THE ASSESSMENT AS CONDUCTED BY MR McLELLAN
Mr McLellan’s letter of 16 December 2009 in which he gave his provisional assessment refers to Rule 720 and the discretion as to the conduct of the assessment “which is to be appropriate to the scope of the dispute and to the amount in dispute”. He stated he considers he is in a position to complete the costs assessment “without any further submissions or evidence from either party before signing [his] certificate”.
He included an invitation for further submissions: “Please advise of any further submissions (including any clerical errors you identify) within 7 days”. Further, in the final paragraph of his letter of 16 December 2009, Mr McLellan stated: “If I do not hear from either party within seven days I will finalize the figures for my assessment. …”
His provisional assessment involved a limited number of deductions from the items included which would have resulted in the issue of a certificate for $4934.60 inclusive of GST, plus outlays.
By letter dated 26 August 2010 Mr McLellan refers to having considered “further submissions of the applicant including the decision of Boyce and others v McIntrye and another”. He took the view that a non-associated third party payer is not bound by a costs agreement (as existed between HCB and its client) and that he must consider whether it is fair and reasonable in the circumstances for the non-associated third party payer to be charged the amount claimed. The letter continued:
I have therefore assessed the professional fees for the work I previously held that I would allow at a rate of $363.00 per hour including GST.
Therefore I have assessed the professional fees payable by the applicant as a non-associated third party payer of $3922.60 (including GST) and the outlays at $45.53 giving a total of costs and outlays of $3968.13
He had determined that pursuant to section 342 of the LPA[3] and the order under which he was appointed to conduct the costs assessment that the respondent to the assessment (that is HCB) should pay the costs of the assessment.
[3] This is extracted at Appendix A
The practical result of the change in approach taken by the costs assessor was that HCB’s fees as allowed were reduced further by about $1000 down to $3968.13 (including GST and outlays).
HCB’S ARGUMENT IN FAVOUR OF REVIEWING THE ASSESSMENT
In essence Mr Challen submits that the assessor has failed to carry out the assessment in the manner required of him, including a failure to provide procedural fairness and a failure to apply the relevant law to the task of the assessment. The Uniform Civil Procedure Rules set out a process for review of a decision set out in the costs assessor’s certificate of assessment (Rule 742).
Failure To Comply With Procedural Fairness
Mr Challen, the principal of HCB deposes to various documents being received in the course of the assessment performed by Mr McLellan. It seems common ground that there were no appearances before Mr McLellan. Accordingly, any submissions or material put before him were in writing (whether by post, emails or faxed documents) or by way of oral submissions.
Mr Taylor of the solicitors for the lessee CSA identifies in his affidavit sworn 10 February 2011 only one communication which he acknowledges was not forwarded to HCB. That was an email of 9 March 2010 from CSA’s solicitors to the costs assessor. That email is exhibited and refers to the relevance of the NSW case of Boyce v McIntyre. The emails also states “We repeat and rely on our previous correspondence of 3 February 2010”.
I have not been able to locate in any documents filed in this matter a copy of correspondence dated 3 February 2010; it is referred to in the letter from Toogoods to HCB dated 18 February 2010. There is reference in HCB’s submissions to an email from CSA’s solicitors of 3 February 2010 which, was, according to HCB’s submissions, provided to HCB on 18 February and contained submissions that the Costs Agreement should be disregarded.
Mr Challen in his affidavit and written submissions identifies the documents which he says passed between HCB, the costs assessor and CSA. I have incorporated the references to those documents in a table marked “Appendix B” to these reasons for decision. There is no contrary evidence that other documents were provided to him either via CSA’s solicitors or directly from the costs assessor prior to the assessment being performed. Although not specifically referred to, it is clear that HCB provided its file to the costs assessor.
Although not the subject of evidence before the court, according to Mr Challen, HCB’s first became aware of the existence of CSA’s List of Objections as a result of a search of the Court file. The existence of such a document is referred to only indirectly in Mr McLellan’s letter dated 16 December 2009 in which his provisional assessment is set out. There he states: “… I have considered the itemized costs account and objection by the client …”. There is no reference to a specific document comprising a list of objections.
In Toogoods’ letter dated 12 July 2010 to Mr McLellan, a copy of which was sent by facsimile to HCB includes “we rely on our previous costs objection filed for this matter which basically draws to the attention of the court that the costs rendered … is excessive and not fair and reasonable”. Accordingly, the existence of the costs objection was made known to HCB on or about 12 July 2010, although it seems not provided to HCB.
In my view, there has been a breach of procedural fairness by denying HCB the opportunity of making submissions to the assessor in relation to at least 2 documents:
1.the List of Objections which was prepared by CSA or its solicitors and forwarded to the costs assessor, but not to HCB.
2.The email from CSA’s solicitors dated 9 March 2010.
There is no dispute that the email from Toogoods, as solicitors for CSA dated 9 March 2010 had not been copied to HCB, but has now been incorporated into an affidavit by Mr Taylor from Toogoods.
It seems that there may also have been other correspondence or communication that passed between the costs assessor and CSA’s solicitors (but not HCB), which was later reported to HCB. For example, in the letter of 13 August 2010 from Toogoods to HCB, there is reference to an earlier email of 16 June 2010 which is not referred to in any of the material deposed to by Mr Challen as having been received by HCB.[4] I have already referred to correspondence from CSA’s solicitors to Mr McLellan of 3 February 2010.
[4] The letter from Toogoods dated 13 August 2010 reads in part:
“We wish to place on record the fact that Mr McLellan sent an email to Mr Macklin on 16 June 2010 wherein he indicated that he was waiting on submissions (if any) on how he should apply section 341(3) of the Legal Profession Act 2007 and that he had not followed up on his email dated 27 April 2010.
Mr McLellan also indicated that if we did not want to make any more submissions to please advise. If we were to make submissions we were requested to give you a copy. We subsequently made submissions dated 12 July 2010 and a copy of those submissions were made available to you. …”
The failure to ensure that the list of objections was provided to HCB is in my view a significant departure from the requirement to ensure procedural fairness. Further, in the absence of disclosure of all material or communications relied on by the costs assessor, particularly when communications were taking place between him and one or other of the disputing parties, it was not possible for each party to know what was being considered in the assessment. In those circumstances, in my view, it is appropriate to review the decision contained in the certificate. In my view, procedural fairness (or ‘natural justice’ as is referred to in Rule 720[5]) requires an opportunity for a party to know what material the costs assessor was considering and to be allowed the opportunity to make submissions about that.
[5] Although this appears in Part 3 (Assessment of Costs other than under the Legal Profession Act 2007), by virtue or Rule 743I, Rule 720 also applies to costs assessed under the LPA.
THE LAW RELATING TO COSTS ASSESSMENT
The Queensland Legal Profession Act 2007 (the LPA) provides that a person who is a ‘third party payer’ may apply for a costs assessment within 12 months of certain events (see s 335 of the LPA).[6] No issue has been raised that the application for assessment is out of time.
[6] The section is set out in Appendix B to these reasons.
The costs assessor, Mr McLellan, took the view that CSA is a “non-associated third party payer”. That expression is defined in section 301, specifically section 301(1) and (3) of the LPA. The characterisation of CSA as a non-associated third party seems not in dispute, and it is a characterisation with which I agree, having regard to the definition and noting the obligation in the Deed of Assignment that the costs are to be paid to the Landlord, as distinct to HCB as the legal practice.
Section 341 of the LPA sets out the criteria for assessment. Section 341(3) of the LPA is important in this matter. That states:
In conducting an assessment of legal costs payable by a non-associated third party payer, the costs assessor must also consider whether it is fair and reasonable in the circumstances for the non-associated third party payer to be charged the amount claimed.
That then requires the reader to look back earlier in that section where, in sub-section (1), it states that a costs assessor must consider: whether or not it was reasonable to carry out the work to which the legal costs relates; whether or not the work was carried out in a reasonable way; and “the fairness and reasonableness of the amount of legal costs in relation to the work except to the extent that section 340 applies to any disputed costs”.
Pursuant to section 340, a costs assessor must assess any disputed costs that are subject to a costs agreement by reference to that agreement with certain exemptions, none of which appear relevant here. Thus, one of the issues in this application is how to construe those relevant provisions of the LPA in the context of CSA as a ‘non-associated third party payer’.
The objectives of the LPA are set out in section 3:
The main purposes of this Act are as follows—
(a) to provide for the regulation of legal practice in this jurisdiction in the interests of the administration of justice and for the protection of consumers of the services of the legal profession and the public generally;
(b) to facilitate the regulation of legal practice on a national basis across State borders.
I was referred to several cases in this application. It appears that there are no Queensland cases relevant to the interpretation of the LPA as it relates to the matters relevant here. I have located only one which considers section 341, but it does not consider section 341(3).[7] The Queensland decisions of Bottoms v Reser, Henley & Anor v State of Queensland & Anor, ASIC v Atlantic J Financial (Aust) Pty Ltd & Ors and Amos v Monsour Legal Costs Pty Ltd were cited.[8] They either pre-date the commencement of the LPA or make no reference to that Act. Accordingly, they must be read having regard to the more recent LPA.
[7] Clayton Utz Lawyers v P & W Enterprises Pty Ltd [2011] QDC 005 Reid DCJ 28/01/2011
[8] The citations for those are, respectively: [2000] QSC 413, [2005] QDC 094, [2007] QCA 235, [2008] QSC 9
I was also referred to the decision of Boyce v McIntyre [2008] NSWSC 1218 and the appeal from that which can be located at [2009] NSWCA 185. Other than one minor area, the New South Wales Court of appeal upheld the decision of the Associate Justice who heard the matter in the Administrative Law List. Boyce considered the New South Wales Legal Profession Act 2004, which is very similar and contains many near-identical provisions to the Queensland LPA. It is therefore highly persuasive. Given that, I consider it useful to extract some remarks both at first instance, and on appeal.
At first instance
31 … [W]here the non-associated third party payer applies for costs assessment, the client is bound by the assessment but the assessment of costs payable by the non-associated third party payer does not affect the amount of the legal costs payable by the client to the law practice. Thus, if the costs assessed were less than the amount charged by the law practice to the client, the client has to pay the difference.
39 … [I]t is difficult to read s361[9] to mean that a costs assessor must assess the costs agreement between a law practice and its client in accordance with the provision of that costs agreement even though the non-associated third party payer had no right to disclosure of certain information nor a right to negotiate the terms of that costs agreement.
[9] Section 361 of the NSW Act is the same as section 340 of the Queensland LPA.
On appeal (Ipp JA delivering the court’s decision)
[19] The point to be noticed about a “non-associated third party payer” is that such a person, while being under legal obligation to pay “legal costs” for legal services provided to the client, owes no legal obligation to the law practice that provided the legal services.
[22] … the introduction in 2006 of the non-associated third party payer provisions in the Legal Profession Act in 2006 can be seen as being for the purpose of consumer protection. In particular, the introduced provisions afford protection to persons who agree, in effect, to indemnify other parties (such as lessors and mortgagees) in respect of legal costs for services rendered to those other parties.
[39] … the Act contemplates that, by reason of the assessment process and the particular parties it binds, the amount owing by a client to a law practice in respect of legal costs might differ from the amount a non-associated third party payer would have to pay the client under an indemnity agreement between them. An assessment required by a non-associated third party payer might reduce the costs payable that non-associated third party payer to the client, but the client’s obligation to the law practice will not be affected by that assessment. This reinforces the notion that an assessment of costs at the instance of a non-associated third party payer may proceed in accordance with criteria that differ from those applicable to an assessment of costs as between the client and the law practice concerned.
DISCUSSION
The costs agreement between HCB and its client Myall Arm Pty Ltd is exhibited to Mr Challen’s affidavit sworn 10 February 2011. It is trite that there is no costs agreement between HCB and CSA. HCB have acted for the Landlord for many years.
The assignment of the lease was consented to subject to the lessee paying the indemnity costs of the solicitors for the Landlord. The tax invoice for that was forwarded prior to the assignment been signed by HCB’s client (and therefore prior to the assignment coming into effect). Accordingly, CSA was aware of the amount of the Landlord’s costs associated with the Landlord’s consent to the assignment.
Mr Taylor correctly refers to the right to seek an assessment at any time within 12 months after the invoice had been sent and it is irrelevant whether or not there was any challenge to the tax invoice. Certainly in the context of an assignment of lease, with consequential financial implications if the assignment did not proceed, it is easy to understand how a lessee may feel compelled to pay the tax invoice to allow the assignment to proceed and then look to whatever rights it had after the assignment of the lease has been effected.
Mr Challen relies on the issue of the tax invoice being issued prior to the Landlord’s signing of the assignment of the lease and the payment of the costs and the absence of any queries or concerns raised about the amount of the tax invoice. Mr Challen deposes to his extensive experience as a solicitor. He also deposes to the only other person working at the firm of HCB was a person who was a practitioner with even more years of experience than he. Accordingly, it was not possible for any of the work to have been assigned to a more junior solicitor, which was the approach taken by Mr McLellan in the preliminary assessment (see objection no. 9 on page 2 of the letter of 16 December 2009. The assessor’s comments explain his approach).
Both parties agree that the categorisation of the lessee as a non-associated third party payer is correct. In my view, noting the consumer protection function of the LPA, and for the reasons from the decision in Boyce which I have extracted above, the costs assessor was not limited by the hourly rates contained in the client agreement. However, the costs assessor was obliged to consider whether it is “fair and reasonable in the circumstances for the non-associated third party payer to be charged the amount claimed”.
The ‘circumstances’ here which ought to have been considered were: CSA’s agreement to pay the indemnity costs; the prior notice of the amount to be charged; the absence of any more junior employee at HCB who could have done the work; and that HCB’s client would have been out of pocket if its costs were not paid in full (that is on an indemnity basis) when it had given consent to its tenant (CSA) to be excused from obligations as lessee.
Those matters persuade me that it was fair and reasonable for CSA as a non-associated third party payer to pay the hourly rate which was the basis of the tax invoice issued on 12 December 2008, and which was referred to in the costs agreement between HCB and its client. Of course, CSA was not a party to that agreement and had not previously been provided with a copy of it.
The deductions contemplated in the preliminary assessment totalled $796. That is just more than 15% of the tax invoice amount ($5282 excluding GST) by $3.70. Accordingly, the contemplated deductions would have brought the matter within section 342 of the LPA, with the consequence that HCB would have been responsible for payment of the costs of the assessment.
HCB in its written submissions provided to the court, at paragraph 14, after referring to the 9 items varied as a consequence of objections allowed said: “McLellan appears to have given the benefit of any doubt to the Respondent”. The reference to “Respondent” there is a reference to CSA. The submissions refer to Bottoms v Reser [2000] QSC 413 where Chief Justice de Jersey stated “considerable liberality should ordinarily be extended in assessing reasonableness” and that “no niggardly or unduly narrow approach would be warranted”. His Honour also apparently accepted the approach taken in EMI Records v EM Wallace Ltd [1983] 1 Chancery 59 at 65) when Sir Robert Megarry said:
The effect of an order on an indemnity basis is … that all the costs incurred will be allowed except any which have been unreasonably incurred or are of an unreasonable amount; and in applying these exceptions, the receiving party will be given the benefit of any doubt.
In relation to indemnity costs, it seems to be accepted that it is only when such costs are outlandish that they should be excluded (Bottoms; ASIC v Atlantic 3 Financial (Aust) Pty Ltd & Ors [2008] QSC 9). In this case, although the work done which generated HCB’s tax invoice was not unusual, the material before me does not persuade me that the charges were outlandish. They were charged by a law practice with a very senior practitioner performing the work and where that law practice had been engaged by its client for many years; the hourly rate is unexceptional when compared with others in costs agreements from other firms that have come before me. To modify the amount charged to that proposed in the preliminary assessment would be, in my view, to take a ‘niggardly’ approach criticised in Bottoms case; to modify the amount to that contained in the certificate of assessment fails to take into account the particular circumstances that were relevant in this matter.
In all the circumstances, in reviewing the decision in the Certificate of Assessment, I set aside the decision of the costs assessor. The tax invoice amount has already been paid. I assume that the costs of the assessment have been paid, but by whom is not clear. If they were paid by HCB, in my view, they are entitled to be reimbursed by CSA the amount of those costs. However, as the identity of the payer is not known, I do not consider that I should make an order in relation to those costs at this time.
The order of the court, made pursuant to rule 742 is that the decision of the costs assessor contained in the certificate of assessment dated 13 November 2010 is set aside.
I will hear submissions on costs, including the costs of the assessment.
APPENDIX A
Legal Profession Act 2007
335 Application by clients or third party payers for costs assessment
(1) A client may apply for an assessment of the whole or any part of legal costs.
(2) A third party payer may apply for an assessment of the whole or any part of legal costs payable by the third party payer.
(3) The costs application may be made even if the legal costs have been wholly or partly paid.
(4) If any legal costs have been paid without a bill, the client or third party payer may nevertheless make the costs application.
(5) A costs application by a client or a third party payer must be made within 12 months after—
(a) the bill was given, or the request for payment was made, to the client or third party payer; or
(b) the costs were paid if neither a bill was given nor a request was made.
(6) However, a costs application made out of time, otherwise than by any of the following, may be dealt with by a costs assessor or a court if, under the Uniform Civil Procedure Rules, the assessor or the court decides to deal with it after considering the reasons for delay—
(a) a sophisticated client;
(b) a third party payer who would be a sophisticated client if the third party payer were a client of the law practice concerned.
(7) If the third party payer is a non-associated third party payer, the law practice must provide the third party payer, on the written request of the third party payer, with sufficient information to allow the third party payer to consider making, and if thought fit to make, a costs application.
(8) If there is an associated third party payer for a client of a law practice—
(a) nothing in this section prevents—
(i) the client from making 1 or more costs applications in relation to costs for which the client is solely liable; and
(ii) the associated third party payer from making 1 or more costs applications in relation to costs for which the associated third party payer is solely liable;
and those costs applications may be made by them at the same time or at different times and may be dealt with jointly or separately; and
(b) the client or the associated third party payer—
(i) may participate in the costs assessment process where the other of them makes a costs application in relation to costs for which they are both liable; and
(ii) is taken to be a party to the assessment and is bound by the assessment; and
(c) the law practice—
(i) must participate in the costs assessment process if a costs application is made under subsection (2) by the associated third party payer in the same way as the law practice must participate in the process if an application is made under subsection (1) by a client; and
(ii) is taken to be a party to the assessment and is bound by the costs assessment.
(9) If there is a non-associated third party payer for a client of a law practice—
(a) nothing in this section prevents—
(i) the client from making 1 or more costs applications in relation to costs for which the client is liable; and
(ii) the non-associated third party payer from making 1 or more costs applications in relation to costs for which the non-associated third party payer is liable;
and those applications may be made by them at the same time or at different times but must be dealt with separately; and
(b) the client—
(i) may participate in the costs assessment process if the non-associated third party payer makes a costs application under subsection (2) in relation to the legal costs for which the non-associated third party is liable; and
(ii) is taken to be a party to the assessment and is bound by the assessment; and
(c) the law practice—
(i) must participate in the costs assessment process;
and
(ii) is taken to be a party to the assessment; and
(d) despite any other provision of this division, the assessment of the costs payable by the non-associated third party payer does not affect the amount of legal costs payable by the client to the law practice.
(10) Subject to this section, a costs application under subsection (1) or (2) must be made in the way provided under the Uniform Civil Procedure Rules.
(11) In this section—
client includes the following—
(a) an executor or administrator of a client;
(b) a trustee of the estate of a client.
third party payer includes the following—
(a) an executor or administrator of a third party payer;
(b) a trustee of the estate of a third party payer.
301 Terms relating to third party payers
(1) A person is a third party payer, in relation to a client of a law practice, if the person is not the client and—
(a) is under a legal obligation to pay all or any part of the legal costs for legal services provided to the client; or
(b) being under that obligation, has already paid all or a part of those legal costs.
(2) A third party payer is an associated third party payer if the legal obligation mentioned in subsection (1)(a) is owed to the law practice, whether or not it is also owed to the client or another person.
(3) A third party payer is a non-associated third party payer if the legal obligation mentioned in subsection (1)(a) is owed to the client or another person but not the law practice.
(4) A legal obligation mentioned in subsection (1) can arise by or under contract or legislation or otherwise.
(5) A law practice that retains another law practice on behalf of a client is not on that account a third party payer in relation to that client.
Uniform Civil Procedure Rules 1999
742 Review by court
(1) A party dissatisfied with a decision included in a costs assessor’s certificate of assessment may apply to the court to review the decision.
(2) An application for review must be filed within—
(a) if reasons are requested under rule 738(1)—14 days after the party receives those reasons; or
(b) otherwise—14 days after the party receives the certificate.
(3) The application must—
(a) state specific and concise grounds for objecting to the certificate; and
(b) have attached to it a copy of any written reasons for the decision given by the costs assessor; and
(c) state any other matter required by a practice direction made in relation to this rule.
(4) The applicant must serve a copy of the application on all other parties to the assessment within 14 days after the application is filed.
(5) On a review, unless the court directs otherwise—
(a) the court may not receive further evidence; and
(b) a party may not raise any ground of objection not stated in the application for assessment or a notice of objection or raised before the costs assessor.
(6) Subject to subrule (5), on the review, the court may do any of the following—
(a) exercise all the powers of the costs assessor in relation to the assessment;
(b) set aside or vary the decision of the costs assessor;
(c) set aside or vary an order made under rule 740(1);
(d) refer any item to the costs assessor for reconsideration, with or without directions;
(e) make any other order or give any other direction the court considers appropriate.
(7) Unless the court orders otherwise, the application for review does not operate as a stay of the registrar’s order.
743I Application of other rules
(1) The following rules also apply to costs assessed under the
Legal Profession Act 2007—
• rule 715
• rule 716
• rule 717
• rule 718
• rule 719
• rule 720
• rule 732
• rule 737
• rule 738
• rule 742.
(2) For the purposes of applying a rule mentioned in subrule (1) that refers to a court or the court, the reference is taken to be a reference to the relevant court.
(3) For the purpose of applying rule 742(5)(b), a reference to a ground of objection not stated in the application for assessment or a notice of objection is taken to be a reference to a ground of dispute not stated in the affidavit mentioned in rule 743A.
(4) For the purpose of applying rule 742(6)(c), a reference to an order made under rule 740(1) is taken to be a reference to a judgment given under rule 743H(4).
APPENDIX B
CHRONOLOGY OF COMMUNICATIONS TO OR FROM THE COSTS ASSESSOR
| No. | Date | Type | Description of communication | Who sent/received the communication (the first party is the sender; the second is the addressee and the third is to whom a copy was sent) |
| 1 | 11/6/09 | Sending blank consent to act form (prior to his appointment) | HCB/HM | |
| 2 | 16/12/09 | Letter | Costs assessor advising of preliminary assessment indicating a proposed reduction of $796 and a balance allowed (including GST) of $4934.60 | JM/Toogoods/HCB |
| 3 | 18/2/10 | Letter | Letter to HCB referring to email sent 3/2/10 in response to facsimile dated 16/12/09 | Toogoods/HCB/JM |
| 4 | 9/3/10 | Letter | Referring to case of Boyce and McIntrye and Ms Rex of Toogoods says “We repeat and rely on previous correspondence of 3 February 2010 | Toogoods/JM |
| 5 | 16/4/10 | Reference to case of Cutter Hughes & Harris v McIntyre | JM/Toogoods/HCB | |
| 6 | 12/7/10 | Letter | Toogoods relying on previous costs objection and refers to client’s assignment of lease to Energetic Pty Ltd (presumably intended to refer to Synergetic Engineering – as the new lessee) | Toogoods/JM/HCB |
| 7 | 13/7/10 | Complaint to JM that Toogoods’ letter of 12 July should not be considered | HCB/JM/Toogoods | |
| 8 | 10/8/10 | Letter | Toogoods seek response from JM to letter to 12 July | Toogoods/JM/HCB |
| 9 | 13/8/10 | Letter | Letter to HCB referring to email from JM to Mr Macklin of Toogoods 16 June[10] | Toogoods/HCB/JM |
| 10 | 26/8/10 | Letter | JM letter to Toogoods setting out varied assessment after considering s341(3) LPA | JM/Toogoods |
| 11 | 26/8/10 | Letter | JM letter to HCB enclosing tax invoice and a copy of the letter to Toogoods containing varied assessment | JM/HCB |
| 12 | 20/9/10 | Letter | HCB letter to JM re JM applying Boyce and McIntyre decision and other case law. Letter seeks a response.[11] | HCB/JM/Toogoods |
| 13 | 19/10/10 | Letter | Requesting HCB to pay assessor’s tax invoice | Toogoods/HCB/JM |
| 14 | 28/10/10 | Letter | Requesting response to earlier letters | HCB/JM/Toogoods |
| 15 | 5/11/10 | Letter | Requesting certificate be filed and Toogoods’ undertaking to pay assessor’s costs | Toogoods/JM/HCB |
| 16 | 25/11/10 | Letter | Letter from HCB requesting reasons | HCB/JM/Toogoods |
| 17 | 3/12/10 | Letter | JM letter setting our reasons for decision contained in Certificate of costs assessment | JM/HCB/Toogoods/ Registrar of Magistrates Court |
[10] The letter reads in part:
“We wish to place on record the fact that Mr McLellan sent an email to Mr Macklin on 16 June 2010 wherein he indicated that he was waiting on submissions (if any) on how he should apply section 341(3) of the Legal Profession Act 2007 and that he had not followed up on his email dated 27 April 2010.
Mr McLellan also indicated that if we did not want to make any more submissions to please advise. If we were to make submissions we were requested to give you a copy.
We subsequently made submissions dated 12 July 2010 and a copy of those submissions were made available to you. …”
[11] We note that in your letter of 26 August 2010 you state that you are applying the decision of Boyce and McIntyre [2009] NSWCA 185 … to this matter.
We have not received a copy of the submissions made by Toogoods on behalf of the applicant to you which refer to that decision and request that we receive a copy of the same.
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