Dempsey v Director of Public Prosecutions

[2019] NSWCA 267

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Dempsey v Director of Public Prosecutions [2019] NSWCA 267

Hearing dates:

11 October 2019

Date of orders:

06 November 2019

Decision date:

06 November 2019

Before:

Meagher JA at [1];
White JA at [2];
Emmett AJA at [3]

Decision:

1. Orders for costs made 26 April 2019 be set aside.
2. Matter be remitted to Scotting DCJ of the District Court for redetermination.

Catchwords:

COSTS – Order for payment of professional costs under Criminal Procedure Act 1986 (NSW), s 213 to be “just and reasonable” – Order for costs under Crimes (Appeal and Review) Act 2001 (NSW), s 28 to be “just”

 

PROCEDURAL FAIRNESS – Primary judge failed to inform applicant that summary nature of the proceedings and fact that a party is not entitled to recover all of its costs would be taken into account – Whether this constitutes denial of procedural fairness

  JUDICIAL REVIEW – Whether exercise of discretion by primary judge to reduce costs by 30% constituted jurisdictional error – Whether any difference between “fair and reasonable” and “just and reasonable” – Whether primary judge addressed wrong question such that jurisdiction conferred by the provision was not properly exercised

Legislation Cited:

Crimes (Appeal and Review) Act 2001 (NSW)
Criminal Procedure Act 1986 (NSW)
District Court Act 1973 (NSW)
Legal Profession Act 2004 (NSW)
Supreme Court Act 1970 (NSW)
Supreme Court Rules 1970 (NSW)

Cases Cited:

Commissioner for ACT Revenue v Alphaone Pty Ltd (1994) 49 FCR 576
Hancock v Rinehart (Lump Sum Costs) [2015] NSWSC 1640
Idoport Pty Limited v National Australia Bank Limited, Idoport Pty Limited v Donald Robert Argus [2007] NSWSC 23
Kirk v Industrial Court of NSW (2010) 239 CLR 531; [2010] HCA 1
Minister of Immigration and Citizenship v Li & Anor (2013) 249 CLR 332; [2013] HCA 18
Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594; [2011] HCA 1

Category:

Principal judgment

Parties:

Rosemarie Dempsey (Applicant)
Director of Public Prosecutions (NSW) (First Respondent)
District Court of New South Wales (Second Respondent)

Representation:

Counsel:
J Sheller SC with D Tang (Applicant)
B Baker (First Respondent)
Submitting Appearance (Second Respondent)

  Solicitors:
Dom Velcic & Co Pty Ltd (Applicant)
Office of the Director of Public Prosecutions (Respondents)

File Number(s):

2019/162892

 Decision under appeal 

Court or tribunal:

District Court of NSW

Jurisdiction:

Criminal

Citation:

Unreported

Date of Decision:

26 April 2019

Before:

Scotting DCJ

File Number(s):

2012/254981

Judgment

1. MEAGHER JA: I agree with the reasons and proposed orders of Emmett AJA.

2. WHITE JA: I agree with Emmett AJA. I would add that if the discount the primary judge adopted were due to the summary nature of the process of assessing costs, by analogy to principles sometimes adopted in civil proceedings where the party entitled to costs elects to seek costs on a lump sum basis rather than assessed costs to which it is otherwise entitled (Hancock v Rinehart (Lump Sum Costs) [2015] NSWSC 1640 at [56]; Idoport Pty Limited v National Australia Bank Limited, Idoport Pty Limited v Donald Robert Argus [2007] NSWSC 23 at [13]), the parties should have been heard as to the appropriateness of the analogy where they were agreed that the applicant was not entitled to that election.

3. EMMETT AJA:

Introduction

The applicant, Ms Rosemarie Dempsey, seeks judicial review of orders for costs made by a judge of the District Court (the primary judge) on 26 April 2019 (the impugned orders). Ms Dempsey has commenced proceedings against the Director of Public Prosecutions (the Director) seeking relief under s 69 of Supreme Court Act 1970 (NSW) (the Supreme Court Act), in which she claims that the impugned orders involved jurisdictional error on the part of the primary judge so as to attract the operation of that provision.

4. Section 69 of the Supreme Court Act relevantly provides that, where formerly the Court had jurisdiction to grant any relief or remedy by way of writ of certiorari, the Court is to continue after the commencement of the Supreme Court Act to have jurisdiction to grant that relief or remedy by way of judgment or order under the Supreme Court Act and the Supreme Court Rules 1970 (NSW). Such a remedy would lie in respect of decisions of an inferior court such as the District Court. However, s 176 of the District Court Act 1973 (NSW) (the District Court Act) relevantly provides that no adjudication of the District Court on appeal is to be removed by any order into the Supreme Court. Section 176 applies as the proceedings were originally an appeal from the Local Court to the District Court, which will be addressed below. Nevertheless, notwithstanding s 176, judicial review under s 69 is available in cases involving jurisdictional error. [1]

   1. See Kirk v Industrial Court of NSW (2010) 239 CLR 531; [2010] HCA 1.

The Conviction and the Appeal

5. Ms Dempsey was the financial controller of Haps Hotels Pty Limited (Haps). Her role included the payment of the expenses of Haps and recording the payments in an accounting system. It appears that some 23 cheques drawn on an account of Haps were paid into accounts of, or associated with, Ms Dempsey although the entries in the Haps accounting system showed different payees. Ms Dempsey was prosecuted in the Local Court of New South Wales on 23 counts of obtaining money by deception. Her case in defence was that the payments made to her represented reimbursement for expenses she had paid on behalf of Haps and for which she was entitled to reimbursement.

6. The Magistrate who heard the prosecution set aside a subpoena issued by Ms Dempsey to Haps for the production of the accounting records and a subpoena to a firm of accountants who provided accounting and auditing services to Haps. The Magistrate considered that the subpoenas were too wide and constituted “fishing”. The prosecution did not seek to introduce the accounting files or the material that had been produced.

7. On 25 November 2014, Ms Dempsey was convicted by the Magistrate. Her Honour held that Ms Dempsey was required to do something more than assert in oral evidence that she had incurred expenses on behalf of Haps, observed that there was no documentary or electronic evidence to support Ms Dempsey’s claim and said that the evidence was all the other way.

8. Ms Dempsey appealed against the convictions to the District Court under the Crimes (Appeal and Review) Act 2001 (NSW) (the Appeal and Review Act). Her case was the same as in the Local Court. However, the primary judge considered that the Magistrate fell into error by reversing the onus of proof or alternatively failing to understand that the prosecution had not tendered or made available to Ms Dempsey the documentation that was capable of proving or disproving her claim of right. On 8 December 2017, his Honour set aside the convictions and penalties imposed by the Local Court. Ms Dempsey then sought an order for costs of the proceedings in the Local Court and for the appeal to the District Court.

The Statutory Scheme

9. Section 213 of the Criminal Procedure Act 1986 (NSW) (the Procedure Act) relevantly provides that the Local Court may, at the end of summary proceedings, if the matter is dismissed, order that the prosecutor pay professional costs to the registrar of that court, for payment to the accused person. Under s 213(2), the amount of professional costs is to be the amount that the magistrate considers to be just and reasonable. The order must specify the amount of professional costs payable. However, s 214(1) of the Procedure Act relevantly provides that professional costs are not to be awarded in favour of an accused person in summary proceedings unless the court is satisfied as to any one or more of certain matters, including that the prosecutor unreasonably failed to investigate, or to investigate properly, any relevant matter of which it was aware or ought reasonably to have been aware which suggested either that the accused person might not be guilty or that, for any other reason, the proceedings should not have been brought.

10. Section 28(2) of the Appeal and Review Act relevantly provides that, in determining an appeal, the District Court may exercise any function that the Local Court could have exercised in the original Local Court proceedings. Thus, in the present case, the primary judge had power to exercise the power of the Local Court under s 213 of the Procedure Act, subject to s 214 of the Procedure Act.

11. In addition, s 28(3) of the Appeal and Review Act relevantly provides that, subject to s 70 of that Act, the District Court may make such order as to the costs to be paid as it thinks just. Section 70(1)(c) of the Appeal and Review Act relevantly provides that costs are not to be awarded in favour of an appellant whose conviction is set aside unless the appeal court is satisfied that the prosecutor unreasonably failed to investigate, or to investigate properly, any relevant matter that the prosecutor was or ought reasonably to have been aware of and that suggested that the appellant might not be guilty or that, for any other reason, the proceedings should not have been brought. Section 72 of the Appeal and Review Act relevantly provides that an appeal court that orders a respondent to pay costs must state a time within which the costs or other amount must be paid.

12. In effect, the primary judge was being asked by Ms Dempsey to exercise the function of the Local Court under s 213 of the Procedure Act to order payment of an amount of professional costs in relation to the proceedings in the Local Court that his Honour considered to be just and reasonable. His Honour was also being asked to exercise the power conferred by s 28 of the Appeal and Review Act to make such order as to costs to be paid by the Director as his Honour thought just.

The Contentions before the Primary Judge

13. The Director opposed Ms Dempsey’s application for costs. The Director submitted to the primary judge in writing on 9 February 2018 that the police had conducted relevant inquiries of the available witnesses to prove the prosecution case and that Ms Dempsey’s claim of right in the Local Court arose well after the police investigation had been completed.

14. The primary judge rejected that submission. His Honour was satisfied as to matters specified in s 70 of the Appeals and Review Act and s 214 of the Procedure Act and was satisfied that the prosecutor in the Local Court had unreasonably failed to investigate Ms Dempsey’s claim of right to the monies that she was accused of having obtained by deception. Accordingly, on 29 March 2018, his Honour ordered that the Director pay Ms Dempsey’s costs “as agreed or assessed”. There is no challenge to the conclusion that s 70 and s 214 were satisfied.

15. By a letter of 11 May 2018 Ms Dempsey claimed costs in an amount of $710,913.09, which was said to represent the total of her fees, costs and disbursements for the matter. A subsequent letter dated 30 July 2018 amended the final total to $713,835.09. Ms Dempsey subsequently offered to accept the sum of $640,136.67 in full satisfaction. In written submissions of 17 August 2018, the Director stated that there was no reasonable prospect of the parties coming to an agreement on quantum on the basis of the material provided and the amount sought. The Director submitted that the matter should be referred to a costs assessor for Ms Dempsey’s reasonable costs of the appeal to be calculated independently.

16. A report dated 5 September 2018 by Mr Greg Walsh, a solicitor and costs assessor, was subsequently provided on behalf of Ms Dempsey. Mr Walsh stated that the total of the costs claimed by Mr Dom Velcic, Ms Dempsey’s solicitor, was $109,774, which he rounded up to $110,000. Mr Walsh said that he had taken the approach of discounting the amount claimed in respect of the proceedings by 20%, to which he added GST, giving a total of $96,000. Mr Walsh said that he had applied “a rather broad-brush approach” and that there were a number of items that in a court ordered assessment would not be regarded as being fair and reasonable, being items that in his opinion were of a “solicitor/client type”. Mr Walsh then set out the disbursements that he considered to be fair and reasonable, giving a total amount of $155,174.50 including GST. He then arrived at a total for costs and disbursements for the Local Court proceedings of $251,974.50.

17. Mr Walsh then addressed the costs of the appeal in the District Court, calculated to be $213,489.50, which he rounded up to $213,500. He said that there were several items claimed that he did not regard as being allowable in a court ordered assessment as they were in effect “solicitor/client” items. He also said that Mr Velcic’s fees needed to be discounted to take into account the fact that counsel undertook a considerable degree of preparation. He considered that a “rather broad approach” was acceptable and that the solicitor costs were fair and reasonable. He discounted the rounded up figure by 20% and added GST, giving a total of $187,000. He allowed disbursements of $190,000, giving a total for costs and disbursements for the District Court appeal of $377,000.

18. Finally, Mr Walsh addressed the question of the costs of the application for costs. The total fees in respect of that application amounted to $57,112. He considered that a reduction of between 20% and 30% should be factored in in respect of those costs reflecting the reduction in costs that were not appropriate in a court ordered assessment in a “party/party circumstance”. Mr Walsh considered that there were a number of items that involved a “solicitor/client component”. He reduced the total of $57,112 by 20% to $45,600 and then rounded down that figure to $40,000.

19. On 6 September 2018, written submissions were made to the primary judge on behalf of Ms Dempsey, supported by an affidavit sworn by Mr Velcic on 6 September 2018. The submissions outlined the provisions of the legislation and indicated that his Honour may have been in error or made a relevant slip in ordering costs “as agreed or assessed”. The submissions invited his Honour to revoke the order made on 29 March 2018 and to make an order for costs in a specified amount specifying a time for payment as provided in s 72 of the Appeal and Review Act.

20. In response to the report by Mr Walsh, the Director submitted a report of Mr Robert Webley, a solicitor and costs assessor, dated 18 October 2018. Mr Webley referred to s 364 of the Legal Profession Act2004 (NSW) (Legal Profession Act), which deals with the assessment of costs ordered by a court or tribunal. Section 364(1) relevantly provides that, 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:

• whether or not it was reasonable to carry out the work in question;

• whether or not the work was carried out in a reasonable manner; and

• what was a fair and reasonable amount of costs for the work concerned.

Section 364(2) relevantly provides that, in considering what is a fair and reasonable amount of legal costs, a costs assessor may have regard to any or all of several matters including:

• the skill, labour and responsibility displayed on the part of the practitioner responsible for the matter;

• the complexity, novelty or difficulty of the matter; and

• the quality of the work done and whether the level of expertise was appropriate to the nature of the work done.

21. Mr Webley accepted that it is quite common for clients to be advised that there was a 20% to 30% difference between costs that they may incur to their own solicitor and costs that may be recoverable on an assessment of ordered costs. Mr Webley said that that approach reflected the difference between what has been described as “solicitor/client costs” and “party/party costs”. He said that many of the items in question may be justified on the basis of the retainer between solicitor and client but are not reasonably justified to be paid by an opposing party pursuant to court ordered costs. However, he considered that the circumstances of the present case were too variable to adopt the approach adopted by Mr Walsh in that on many occasions the approach is “well wide of the mark” when a matter is assessed in detail.

22. Mr Webley expressed his opinion that the fair and reasonable costs on an ordinary basis for the work in the District Court was $167,075 for solicitors’ costs and $119,148.05 for disbursements which, together with GST of $28,622.31, gave a total of $314,845.36. Mr Webley then set out some 49 items where he considered the amount claimed by Mr Velcic was not fair and reasonable. In relation to some six of those items, Mr Webley indicated that the disallowance was because the items related to “solicitor and client”. Mr Webley expressed the opinion that, in round figures, the fair and reasonable costs in relation to the District Court proceedings, including GST, amounted to $315,000.

23. In a supplementary report dated 8 November 2018, Mr Walsh revised his opinion following Mr Webley’s report. Mr Walsh indicated that the major differences in opinion between himself and Mr Webley were:

• the approach taken as to the fair and reasonable costs charged by Mr Velcic and counsel;

• whether the approach necessitated an item by item approach or one in which there be a percentage reduction; and

• whether there can be any compromise in the light of Mr Webley’s report.

Mr Walsh expressed the revised opinion that a fair and reasonable amount to be allowed for Ms Dempsey’s costs in the District Court proceedings was $394,300 and a fair and reasonable amount for the costs of the Local Court proceedings was $252,000, making a total of $646,300. He confirmed his view that $40,000 was a fair and reasonable amount for the hearing of the costs application.

24. On 9 November 2018, further written submissions were made to the primary judge on behalf of Ms Dempsey in the light of Mr Webley’s report and Mr Walsh’s second report. The submission summarised the differences as follows:

• Mr Walsh’s first report reduced the amount claimed for solicitor’s costs in the Local Court by 20%;

• Mr Webley’s report did not express any opinion in relation to the quantum of costs in the Local Court;

• Mr Walsh’s first report reduced the amount for solicitor’s costs in the District Court by 20% whereas Mr Webley’s report reduced the amount claimed by approximately 30% and Mr Walsh’s second report conceded that a reduction by 25% might be appropriate, reducing the relevant figure to $176,500;

• Mr Walsh’s first report allowed total disbursements in the District Court at $190,000 whereas Mr Webley’s report allowed only $119,148.05. Mr Walsh’s second report conceded that, on an item by item basis, disbursements might be reduced to $177,800. Mr Webley’s report expressed the opinion that a total of $315,000 would be a fair and reasonable amount for the District Court while Mr Walsh expressed the opinion that the fair and reasonable amount for the District Court would be $354,300;

• Each of Mr Walsh’s reports allowed a reduction of 20% to 30% to arrive at a rounded figure of $40,000 for the costs of the costs application in the District Court; and

• Mr Webley’s report did not refer to or express any opinion as to the quantum of costs in the District Court relating to the application for costs.

25. The Director made further written submissions to the primary judge on 20 November 2018, referring to the reports from Mr Walsh and Mr Webley, saying that both assessors agreed that s 364 of the Legal Profession Act applied in relation to the assessment of costs. The Director accepts that that is not necessarily correct.

26. The Director’s submission of 20 November 2018 observed that, while a global approach had been adopted by Mr Walsh, Mr Webley had taken the approach of assessing individual solicitor and client invoices. The submission referred to Mr Webley’s comments that Mr Walsh’s “global” approach was too variable, given the scope of the work involved and the circumstances of the items claimed. The Director submitted that, given the amount involved, extreme care was required to ensure that expenditure of public monies was sufficiently scrutinised. The Director submitted that the “global” approach in the assessment of quantum would not result in an accurate assessment of what was “fair and reasonable”.

25. Supplementary submissions in reply were provided on behalf of Ms Dempsey on 30 November 2018, in which it was submitted that, given the level of agreement between Mr Walsh and Mr Webley in relation to the rates charged and the method for assessing reasonableness and fairness, a global approach was not wrong or inappropriate in the circumstances. The submission asserted that both approaches could be adapted or combined to produce a result that represented “fair and reasonable” costs.

26. Ms Dempsey’s application for costs came before the primary judge for directions on 7 February 2019, when his Honour indicated that he would be assisted by a supplementary report by Mr Webley in relation to the costs in the Local Court. His Honour said that he would make a decision based on the parties previous submissions and did not need to hear further from the parties arising from any updated report from Mr Webley. After a brief adjournment, his Honour said that he also would be assisted by a supplementary report from Mr Webley regarding the costs of the application for costs. His Honour adjourned the matter to 1 April 2019 for mention on the basis that if there were to be no further submissions, he would vacate that date and reserve his decision.

27. Mr Webley provided a further report dated 8 March 2019 as to:

• the reasonable costs of Mr Velcic and counsel in respect of the application for costs; and

• a reasonable amount of costs for Mr Velcic and counsel in relation to the summary proceedings in the Local Court.

Mr Webley said in that report that he had assessed the individual solicitor/client invoices relating to the Local Court proceedings and that, having reviewed all of the material, “the fair and reasonable” costs on an ordinary basis for the Local Court work was $92,220.70 for solicitors’ costs and $127,443.50 for disbursements, giving a total of $219,664.20. Mr Webley expressed the opinion that the items claimed by Mr Velcic were “fair and reasonable” save for some 20 items. Of those, one was disallowed as being “solicitor/client in nature”. Mr Webley said that he agreed with Mr Walsh’s comments in relation to hourly rates and in relation to preparation fees. In summary, Mr Webley considered that “fair and reasonable” costs in relation to the Local Court proceedings, including GST, was $219,665 and that the fair and reasonable costs in relation to the application for costs, including GST, was $40,000.

30. Mr Webley’s report was provided to Ms Dempsey’s solicitors on 14 March 2019. Mr Velcic replied to the Director by email on that day confirming that no further material would be submitted for Mr Webley’s consideration and that no further submissions would be made on behalf of Ms Dempsey. Mr Velcic suggested that the primary judge be asked to finalise the matter in chambers. The Director consented to the course proposed by Mr Velcic and confirmed that no further submissions were to be made in the light of Mr Webley’s report.

The Impugned Orders

31. In his reasons of 26 April 2019, the primary judge recorded that Ms Dempsey relied on Mr Walsh’s reports of 5 September 2018 and 9 November 2018 and that the Director relied on the reports of Mr Webley’s of 18 October 2018 and 8 March 2019. His Honour noted that, after the reports were provided to the Court, the parties had agreed that the matter should be dealt with on the basis of the written submissions without any oral argument.

32. The primary judge said that he would have been satisfied, pursuant to s 214 of the Procedure Act, that an award of costs was justified and that Ms Dempsey was entitled to costs that were “just and reasonable”. His Honour was satisfied that a “just” order for costs in respect of the appeal proceedings included a costs order that covered both the Local Court proceedings and the District Court appeal. His Honour said that, after considering all of the evidence on the application as to the quantification of the costs order, he preferred the evidence of Mr Webley, that he was persuaded by Mr Webley’s reasoning and that he agreed with the matters Mr Webley had identified as being “excessive”. His Honour expressly agreed that the use of senior counsel was reasonable and the rates charged by each of the lawyers was fair and reasonable.

33. The primary judge then said:

“However, in the exercise of my discretion, I am of the view that the award of costs should be reduced further to arrive at a just and reasonable result taking into account that the matters were summary in nature and a costs order will not usually result in a complete recovery of costs paid. The appropriate reduction is 30% which I have rounded down to $400,000.”

His Honour then made the impugned orders, namely, that his order of 29 March 2018 be revoked to the extent that it provided for Ms Dempsey’s costs to be agreed or assessed and that the Director pay Ms Dempsey’s costs in the sum of $400,000 within 28 days.

Ms Dempsey’s Complaints

34. In her amended summons filed in Court on 11 October 2019, Ms Dempsey relies on the following grounds:

1. In determining that the appropriate sum for costs was $400,000, the primary judge denied her procedural fairness by failing to inform her that his Honour was contemplating the following matters in reaching his conclusion:

• the fact that the proceedings were summary rather than indictable; and

• the fact that a party is not entitled to recover all of its costs,

such that Ms Dempsey was denied the opportunity to address on those matters, and in the alternative;

2. The exercise of discretion by his Honour in reducing costs by 30% by taking into account those matters was illogical or irrational and constituted jurisdictional error.

35. In the amended summons, Ms Dempsey seeks an order setting aside the orders made by the primary judge and an order that the DPP pay her costs in the sum of $574,665 plus interest. However, she now accepts that, if the Court were to set aside the impugned orders, the matter should be remitted to the primary judge for determination according to law.

Principles as to Jurisdictional Error

36. Jurisdictional error will be established where an inferior court mistakenly asserts or denies the existence of jurisdiction or if, in a case where it correctly recognises that jurisdiction exists, it misapprehends or disregards the nature or limits of its functions or powers. [2] Procedural fairness normally requires a court to identify, for a person affected by its decision, any critical issue that is not apparent from the nature of the decision or the terms of the statutory power exercised. Such a court must also advise of any conclusion adverse to the person affected that would not obviously be open on the known material. However, a court is not required to expose its thought processes or provisional views for comment before making the decision. [3] Thus, a person likely to be affected by a court’s decision is entitled to put information and submissions to the court in support of an outcome that supports that person’s interests. That entitlement extends to the right to rebut or qualify, by further information, and comment upon by way of submission, adverse material from other sources that is put before the court. [4]

    2. See Kirk v Industrial Court of NSW (2010) 239 CLR 531; [2010] HCA 1 at [72].

    3. See Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594; [2011] HCA 1 at [9].

    4. See Commissioner for ACT Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 591-592.

37. Where on the facts of a case a decision of an inferior court is unreasonable or plainly unjust, a reviewing court may infer that in some way there has been a failure to exercise a discretion properly. Even where some reasons have been provided, it may nevertheless not be possible for the reviewing court to comprehend how the inferior court arrived at its decision. Thus, a conclusion of unreasonableness may be applied to a decision that lacks an evident and intelligible justification, such that the reviewing court may infer that the discretion under review has not been properly exercised in accordance with the power conferred by the relevant statute. [5]

    5. See Minister of Immigration and Citizenship v Li & Anor (2013) 249 CLR 332; [2013] HCA 18 at [76].

Error of the Primary judge

38. As indicated above,[6] the criterion for the Local Court costs is the amount that the court considers “to be just and reasonable” and the criterion for the District Court costs is such order “as [the court] thinks just”. However, in dealing with both costs in the Local Court and costs in the District Court, Mr Walsh and Mr Webley both assessed what was “fair and reasonable”. There is nothing in the reasons of the primary judge to indicate that his Honour treated “fair and reasonable” as being different from either “just and reasonable” or “just”. The primary judge concluded that the costs assessed on the basis of Mr Webley’s opinion should be reduced by 30% to arrive at “a just and reasonable result”. However, Mr Webley had expressed his opinion as to the quantum of “fair and reasonable costs” for each of the Local Court proceedings, the District Court appeal and the application for costs.

    6. See [9] and [11].

39. The primary judge reduced Mr Webley’s assessment in order to arrive at “a just and reasonable result”. That step suggests that, having accepted Mr Webley’s opinion as to the amounts that were “fair and reasonable” his Honour considered that it was necessary to reduce that assessment to arrive at an amount that was “just and reasonable”. That phrase, of course, is relevant for the Local Court proceedings but is not the language employed by the statute in relation to the District Court appeal. Again, however, his Honour did not indicate that there was a relevant difference between what was “just” and what was “just and reasonable”.

40. The primary judge appears to have treated the criteria “just and reasonable”, “just” and “fair and reasonable” as equivalent in meaning. At no stage in the procedure described above was a submission made that costs that were “fair and reasonable” assessed under s 364 of the Legal Profession Act would not be regarded as being either “just and reasonable” for the purpose of the Procedure Act or “just” for the purpose of the Appeal and Review Act. At no time did his Honour indicate to the parties that he proposed to draw a distinction between an assessment of what was “fair and reasonable” for the purpose of the Legal Profession Act, on the one hand, and what was “just and reasonable” or “just” for the purpose of the other legislation.

41. The Director accepted that if procedural fairness required the parties to be directed to the precise question of whether a discount should be applied to the amount that Mr Webley assessed as fair and reasonable, there would have been a denial of procedural fairness. The Director contended, however, that the matter should not be considered at that level of abstraction because to do so would impermissibly involve this Court in merits review. The Director contended that the question should be approached at a higher level of abstraction for the purposes of determining whether there has been a denial of procedural fairness and that in the present case there was no denial of procedural fairness because the parties were directed to the question framed at that higher level of abstraction.

42. Ms Dempsey was not afforded the opportunity of dealing with the proposition that a reduction from what was “fair and reasonable” was necessary in order to arrive at what was “just and reasonable” or “just”, if that is what his Honour did. To that extent, Ms Dempsey was denied procedural fairness in relation to that question. On the other hand, if there is, as a matter of law, no difference between what is “fair and reasonable”, on the one hand, and what is “just and reasonable” or “just”, on the other, his Honour appears to have addressed the wrong question, such that he failed properly to exercise the jurisdiction conferred by the relevant provision. Either way, there was jurisdictional error on the part of his Honour in applying the 30% discount referred to above.

43. It is clear enough that both Mr Walsh and Mr Webley recognised a distinction between solicitor and client costs, on the one hand, and party and party costs, on the other. So much is apparent from the summary of their reports set out above. Of course, if the primary judge simply overlooked that there had been a reduction by Mr Webley to take account of the fact that solicitor and client costs exceed party and party costs, that would have been an error within jurisdiction. That appears to be his Honour’s intention in referring to the fact that a costs order will not usually result in a complete recovery of costs paid. However, while oversight may be an error within jurisdiction, denial of procedural fairness involves jurisdictional error, as the Director conceded. The failure to inform Ms Dempsey that his Honour proposed to make a further reduction to take account of the fact that an order for costs is not intended to be a full indemnity was a denial of procedural fairness.

44. The reference by the primary judge to the matters being “summary in nature” is not entirely clear. That is to say, it is unclear whether his Honour was referring to the summary nature of the proceedings in the Local Court, on the one hand, or the summary nature of the process of assessing costs in which he was engaged, in so far as that process did not involve detailed assessment, on the other. In the latter case, it may be appropriate to discount a figure arrived at in recognition of the nature of the process as being an estimate of what might be “just and reasonable” or “just” or, if it comes to that, “fair and reasonable”. Whatever his Honour had in mind, Ms Dempsey was denied procedural fairness to the extent that she was not informed that a reduction would be made from the assessments made by Mr Webley on the basis of the process that was being contemplated.

Conclusion

45. The conclusion of the primary judge was affected by jurisdictional error. It follows that the impugned orders should be set aside. The matter should therefore be remitted to the primary judge for redetermination according to law. The parties have agreed that there should be no order as to the costs of these proceedings, irrespective of the outcome.

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Endnotes

Amendments

06 November 2019 - Order 2 amended

Decision last updated: 06 November 2019