Freeman v McNally

[2003] NSWSC 780

CITATION:	Freeman v McNally & Anor [2003] NSWSC 780
HEARING DATE(S):	14 August 2003
JUDGMENT DATE:	26 August 2003
JURISDICTION:	Common Law Division
JUDGMENT OF:	Master Malpass
DECISION:	The Summons is dismissed. The plaintiff is to pay the costs of the Summons.
CATCHWORDS:	Appeal from costs assessor - costs payable as a result of an order on indemnity basis - any challenge should have been brought before a panel - application of test - sufficiency of reasons - no matter of law.
LEGISLATION CITED:	Legal Profession Act 1987, s 208A, Sub div 3, s208F (2) and (3), s 208JAA, s 208L. District Court Rules 1973, Pt 39A r 13. Legal Profession Regulation 2002, cl 61.
CASES CITED:	Madden v NSW Insurance Ministerial Corporation [1999] NSWSC 196. Turner v Pride [1999] NSWSC 850.
PARTIES :	Lindsay Freeman (Plaintiff) v Peter John McNally (First Defendant) Elio Friegel (Second Defendant)
FILE NUMBER(S):	SC 10724 of 2003
COUNSEL:	Mr J Lichtenberger (Plaintiff) N/A (First Defendant) Mr K Pierce (Second Defendant)
SOLICITORS:	CBD Law (Plaintiff) I V Knight - Crown Solicitor (First Defendant) Stewart Cuddy & Mockler (Second Defendant)

LOWER COURTJURISDICTION:	Costs Assessment
LOWER COURT FILE NUMBER(S):	91860 of 2002
LOWER COURT JUDICIAL OFFICER :	Peter John McNally

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Master Malpass

Tuesday 26 August 2003

10724 of 2003 Lindsay Freeman v Peter John McNally & Anor

JUDGMENT

1 MASTER: The plaintiff commenced proceedings in the District Court claiming damages arising out of personal injury. Judgment was entered in his favour and he obtained an order for costs on an indemnity basis.

2 His solicitors gave a bill of costs. An application for assessment of the costs was made to this Court. The application was referred to a costs assessor (Mr McNally).

3 He received detailed objections to the bill and submissions in reply to those objections. There was other communication between the Costs Assessor and the parties.

4 The Costs Assessor assessed the bill of costs. He issued a Certificate As To Determination. He also provided a statement of reasons for the determination.

5 The effect of the determination was to reduce the amount claimed in the bill ($48,041) to $33,411.69. The total amount to which objection had been earlier taken was in the sum of $14,550.10.

6 These proceedings were commenced by Summons filed on 24 March 2003. The purport of the Summons is to challenge the determination pursuant to s 208L of the Legal Profession Act 1987 (the Act). The section restricts the appeal to a matter of law.

7 Before proceeding further, I should digress to deal with a matter which is of great concern to this Court. In bringing this appeal, the plaintiff has chosen to hurdle the primary avenue of challenge to a costs assessor’s determination (a review by a panel).

8 The appeal does not raise any novel or difficult questions of law. It seeks to ventilate questions which a panel of experienced practitioners could be considered more than well equipped to handle. It was the intention of the legislature that cases such as this (if a challenge must be brought), should be taken to the panel.

9 Because of the large volume of appellate work now coming to this Court, it no longer has the capacity to deal with matters that can be appropriately dealt with elsewhere. The time is approaching where this Court may have to give serious consideration to dismissing appeals of this nature on the ground that the challenge should have been brought before a panel.

10 I now return to this appeal. Broadly speaking, there were two avenues of attack. Firstly, it was said that the Costs Assessor failed to apply the proper test in assessing indemnity costs. Secondly, it is said that the disclosure of reasoning process was inadequate.

11 It is common ground that the relevant test is to be found in Pt 39A r 13 of the District Court Rules 1973. It is in the following terms:-

“ 13. Indemnity basis

On an assessment on the indemnity basis, all costs shall be allowed except is so far as they are of an unreasonable amount or have been unreasonably incurred, and any doubts which the assessor may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the receiving party.”

12 The intention of the rule is clear. All costs are to be allowed except in so far as they are of an unreasonable amount or have been unreasonably incurred. Where the Costs Assessor is in doubt concerning any of those two matters, he or she is to resolve that doubt in favour of the receiving party.

13 At the commencement of the expression of his reasoning process, the Costs Assessor recites that the costs order was made on an indemnity basis and sets forth r 13. There can be no doubt that he approached the assessment task with the correct test in mind.

14 He further recited inter alia that he had considered each item of the bill, the detailed objections, the responses from the applicant and the documentation produced by the parties. He then proceeded to identify the nature of the items that had been the subject of a reduction and set out an expression of the reasons showing why reduction had taken place.

15 In some instances, in expressing the reasoning process he has used words such as “not fair and reasonable” instead of “unreasonable amount” or “unreasonably incurred”.

16 These instances may reflect some looseness in the usage of terminology. However, it seems to me that there can be no doubt as to the intention of the Costs Assessor. He was intending to say that there was a reduction because the claim was unreasonable in a relevant respect. None of the reductions were the subject of doubt.

17 One of the complaints made is that no table has been provided which inter alia identifies each of the relevant items and the reduction made in respect thereof. The nature of the items affected and the essential ground for the reduction was disclosed. I am not satisfied that there was a need for a table or the like in this case. The lack of it did not handicap the court or the parties in the conduct of the appeal. The need for any further detail may have been satisfied by application of the disclosed reasoning process to the documentation had by the Costs Assessor (Madden v NSW Insurance Ministerial Corporation [1999] NSWSC 196). The plaintiff did not pursue such an approach.

18 A statement of reasons is required pursuant to s 208JAA of the Act and the regulations (cl 61 of the Legal Profession Regulation 2002). It needs to be borne in mind that a costs assessor is not a judicial officer and his disclosure of reasoning process is not required to meet what is expected of a court in a judgment. In my view, the statement of reasons complies with the Act and regulations and is not otherwise deficient in the disclosure of the Cost Assessor’s reasoning process.

19 In case there should be misunderstanding, I should also add that this is not a case in which the Costs Assessor was dealing with an application relating to “a bill of costs” (in the sense that it is used in the Act). He was dealing with an application relating to costs payable as a result of an order. Accordingly, s 208A of the Act has no application and the assessment process was not restricted to “disputed costs” (see inter alia Turner v Pride [1999] NSWSC 850).

20 The assessment of costs payable as a result of an order is made pursuant to Sub div 3. During argument, reference was made to sub-sections (2) and (3) of s208F. In my view, the assessment complied with the relevant provisions.

21 The plaintiff bears the onus of satisfying the court that the determination should be disturbed. I am not satisfied that the onus has been discharged.

22 The Summons is dismissed. The plaintiff is to pay the costs of the Summons.

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Last Modified: 08/28/2003