Gorczynski v Beilby
[2005] NSWSC 884
•5 September 2005
CITATION: Gorczynski v Beilby [2005] NSWSC 884
This decision has been amended. Please see the end of the judgment for a list of the amendments.HEARING DATE(S): 17/08/05
18/08/05
26/08/05
JUDGMENT DATE :
5 September 2005JURISDICTION: Common Law Division
JUDGMENT OF: Kirby J
DECISION: (1) In the action by Mr Peter Gorczynski against Beilbys (2004/13454) the amended summons is dismissed with costs; (2) In the action by Scope Data Systems against Beilbys (2004/13455) the amended summons is dismissed with costs.
CATCHWORDS: Costs - dispute with solicitor - right of solicitor to withdraw bill of costs and substitute a new bill - the rule and the exceptions - whether bill in taxable form - right to amend application for assessment - whether costs assessor obliged to give reasons for ruling - whether error of law.
LEGISLATION CITED: Legal Practitioners Act 1987
Legal Profession Regulations 1994
Legal Profession Regulations 2002CASES CITED: Scope Data Systems P/L v Horowitz (unreported, 30.7.97, Master Harrison)
Florence Investments P/L v H G Slater & Co (1975) 2 NSWLR 398
Bowen & Ors v Campbell & Ors (unreported, Master Malpass, 2.12.97)
Re Macnamara's Costs (1884) 1 WN 23
Ex Parte Steel (1898) 15 WN (NSW) 96
Re Sullivan Bros; Ex Parte Morris (1915) 32 WN (NSW) 127
Ex Parte Cameron; Re a Bill of Costs (1956) 73 WN (NSW) 393
Loveridge v Botham (1797) 1 Bos & Pul 49; 126 ER 772
Re Edwin Sutherland & Co's Bill of Costs (1971) Qd R 318
Re Thompson (1885) 30 Ch D 441
Re Grant, Bulcraig & Co [1906] 1 Ch Div 124
Redfern v Mineral Engineers P/L [1987] VR 518
Re Lippiatt & Co's Bill of Costs (1998) 1 Qd R 69
Re Holroyde & Smith (1881) 43 LT 722
Brierley v Reeves (2001) 51 NSWLR 689
Soulemezis v Dudley (Holdings) P/L (1987) 10 NSWLR 247
Pettitt v Dunkley (1971) 1 NSWLR 376
Stoker v Adecco Gemvale Constructions P/L & Anor [2004] NSWCA 449
Public Service Board v Osmond (1986) 159 CLR 656PARTIES: Peter Gorczynski (Pl/Appl)
William Beilby partner of Beilby Poulden Costello (Def/Resp)
Scope Data Systems Pty Limited (Pl/Appl)
William Beilby partner of Beilby Poulden Costello (Def/Resp)FILE NUMBER(S): SC 2004/13454; 2004/13455
COUNSEL: P I Lakatos (Pl/Appl)
C P Taylor (Def/Resp)SOLICITORS: Brian Muir & Company (Pl/Appl)
Beilby Poulden Costello (Def/Resp)
LOWER COURT JURISDICTION:
IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISIONJUSTICE DAVID KIRBY
2004/13454 GORCZYNSKI v WILLIAM BEILBYMonday 5 September 2005
partner of BEILBY POULDEN COSTELLO
JUDGMENT
1 KIRBY J: Mr Peter Gorczynski and Scope Data Systems Pty Limited ("Scope Data Systems") have appealed against determinations made by a costs assessor. A right of appeal to the Supreme Court is given under s208L(1) of the Legal Practitioners Act 1987 ("the Act") where the assessor has made an error of law. Here, the error said to have been made by the assessor concerns the right of a solicitor, whose accounts remain unpaid, to withdraw those accounts and present fresh assessments, including assessments in a higher amount.
Retention of the solicitor.
2 In 2000, Mr Peter Gorczynski approached Ms Lisa Panucci of Messrs Beilby Poulden Costello, solicitors ("Beilbys") on two separate occasions, seeking her assistance in respect of litigation which was then underway. First, in July 2000, Mr Gorczynski, in his capacity as a director of Scope Data Systems, gave instructions to act for that company in Local Court proceedings, where it had been named as a defendant (Ex A, doc A1). Then, in October 2000, Beilbys were again retained, this time on behalf of Mr Gorczynski himself, in respect of an equity action and a costs application against Mr Gorczynski arising from that action.
3 Accounts were rendered from time to time by Beilbys to Scope Data Systems and to Mr Gorczynski. The accounts were unusual. They were not the familiar lump sum approximation of work completed. Rather, as foreshadowed in the costs agreements, Beilbys rendered accounts in which they identified each service provided, the date it was provided and the time taken in terms of six minute units. The six minute units were then tallied and a charge made at the specified hourly rate ($250 per hour) for the time taken. The disbursements were separately identified, including photocopying expenses, fax charges and GST. The accounts were signed. On some, but not all accounts, there were the letters "E&OE". Thereafter, Scope Data Systems and Mr Gorczynski each paid monies to Beilbys, although not the full amount outstanding.
4 On or about 14 March 2002, a dispute erupted between Mr Gorczynski and Beilbys. Beilbys determined that it would no longer act for either Scope Data Systems or Mr Gorczynski. It filed appropriate notices. It thereafter sought to recover its costs. It recognised, however, that there were some items included in its accounts which required adjustment. In respect of some bills, it therefore issued a fresh account in a lower amount.
Attempts to recover outstanding costs.
5 Beilbys then asked Mr Gorczynski and Scope Data Systems to pay the costs outstanding. He and the company refused to do so. Mr Gorczynski asserted, by letter of 8 July 2002, that certain costs were incurred unnecessarily. He added these words: (Ex A, doc C1)
- "In relation to your bills (both to me and Scope), I have asked Ms Panucci to re-issue the bills in proper assessable form showing all the required details but I have not received those."
6 Mr Gorczynski was not a lawyer. It may be inferred, nonetheless, that he had some knowledge of the process of costs assessment (Scope Data Systems Pty Limited v Horowitz (unreported, 30 July 1997, Master Harrison).
7 Thereafter, Beilbys sought to recover their costs. On 12 August 2002, they issued Statements of Liquidated Claim in the Local Court against Mr Gorczynski and against Scope Data Systems. The claim against Scope Data Systems was in the sum of $16,746.64 plus costs and interest. The claim against Mr Gorczynski was for $15,136.75. Default judgments were signed on 8 November 2002.
8 A solicitor (or barrister) is given the right to commence proceedings to recover costs, provided that at least "30 days have passed since a bill for those costs was given to the person in accordance with this Division" (s192(1) of the Act). The reference to "this Division" is a reference to Division 4 of Part 11 of the Act. Division 4 includes s193 which prescribes the form of bills of costs. A bill of costs must conform with the Regulations (and relevantly, regn 22A of the Legal Profession Regulations 1994). It must be signed (s194) and delivered in one of the ways specified in s195. One infers that, at least at that point in time, Beilbys believed that the accounts they had rendered to Mr Gorczynski and Scope Data Systems could be characterised as bills of costs for the purposes of the Act. They said as much in correspondence from time to time thereafter.
9 On 19 February 2003, Mr Gorczynski and Scope Data Systems filed notices of motion, supported by affidavits, seeking to set aside the judgments. At the same time, Mr Gorczynski wrote to Beilbys (Ex A, doc C4). He denied that he personally owed $15,136.75. He asserted that, at best, the amount owed was $10,486.10. He alleged, however, that he was entitled to deduct a number of items. He was prepared to acknowledge that he owed $8,121.10 (Ex A, doc C4 p2). On 19 February 2003, Beilbys replied. They said that they had made "a typographical error" in the sum claimed in the action against Mr Gorczynski personally. The amount owing was $10,485.70, not $15,136.75. They added that they would adjust the figure in the judgment debt accordingly. They also conceded an amount of $695.00 in the Scope Data Systems matter, arising from a court attendance by a person other than Ms Panucci. They concluded their letter saying this: (Ex A, doc C4A)
- "We note that you have not provided us with substantial reasons as to why we should not pursue you for the debt outstanding."
10 The correspondence continued without resolution. On 12 March 2003, Mr Gorczynski wrote to Beilbys. His letter included these words: (Ex A, doc C6)
- "In relation to the billing dispute and your comments about assessment, I have previously asked for further adjustments to the subject invoices and for them to be reissued in properly itemised form. I speak of the three disputed invoices issued in March 2002 in both proceedings.
- In the absence of any clear response to my last letter or indication of your intentions, I again ask for a properly itemised version of those invoices in assessable form, including an item number against each attendance; who performed the attendance (if not Ms Panucci) and the cost of each attendance. They are now needed urgently."
(emphasis added)
11 These words were not simply a request for particulars. They signalled Mr Gorczynski's assertion that the foundation for the action against him and his company was defective. The bills were not in assessable form.
12 The motions by Mr Gorczysnki and his company to set aside the judgments came before the Local Court in May 2003. Mr Gorczynski described what occurred in these words: (Doc F12)
- "Beilby agreed to have the judgment debt set aside and to discontinue its action after conceding that it had grossly over claimed the amount being sued on. Beilby did not indicate that it intended to issue Gorczysnki with fresh bills and seek assessment.
- Beilby continued its Local Court action against Scope."
(emphasis in original)
13 The reference to the "gross over claim" was a reference, no doubt, to the concession made by Beilbys in February that the correct amount owing was $10,486.10. The Scope Data Systems judgment was set aside. On 21 May 2003 a defence was filed in respect of that action. Mr Gorczynski retained Jackson Smith, solicitors, to act for his company.
14 On 21 July 2003, Jackson Smith wrote to Beilbys concerning the Scope Data Systems action. The letter is important to an understanding of Mr Gorczynski's objection to the costs assessments provided by Beilbys. It recapitulated the history (supra para 10: Ex A, doc C6). It said this: (Ex A, doc C7)
- "We are instructed that:
- a) our client has on several occasions drawn your firm's attention to defects in the subject invoices and has requested that they be reissued in proper form
- b) these requests were made well before the filing of the Statement of Claim
- c) a further request was made by letter dated 12 March 2003 (copy enclosed)."
15 The letter then referred to discussions on 17 July 2003 at court between counsel for each party. It said this:
- "As was indicated to Counsel for the plaintiff at court on 17 July 2003 and as you are well aware the Legal Practitioners Act imposes strict obligations on legal practitioners which have to be observed before any proceedings are commenced."
16 The letter concluded by very specifically identifying the defects relied upon by the company. It said:
- "S192 of the Act in conjunction with clause 45 of the Regulations (as they then applied at the time of the subject invoices) reveal certain deficiencies which we believe to be vital to the plaintiff's cause of action:
- 1. The plaintiff's invoice of 18 March 2002 is not addressed to the defendant which is a fatal defect. Proceedings cannot be commenced for recovery of the fees subject of the invoice until a bill in compliance with the Act and Regulations has been delivered to the client. The invoice is addressed to Peter Gorczynski.
- 2. Each of the invoices comprising the balance asserted to be due (as stated in the March 2002 account rendered) must comply in full with clause 45 of the Regulations as they were at the relevant time. In our submission those bills of costs are inadequate in that they fail to adequately include the details required by sub-paragraphs (g), (h) and (i) of clause 45.
- That being the case, the proceedings appear to have been commenced prematurely.
- To avoid incurring further costs unnecessarily would you kindly advise whether the plaintiff intends to discontinue the proceedings."
17 The reference to regn 45 was a mistake. Regulation 45 appears in the Legal Profession Regulations 2002, which came into operation on 1 September 2002. At the time the bills were delivered to Mr Gorczynski and Scope Data Systems, the relevant regulation was regn 22A of the Legal Profession Regulations 1994. That regulation was in the same terms, apart from the requirement in regn 45 that there be a statement that the client may apply to have the costs assessed under Part 11 of the Act (regn 45(d)).
18 The following month, August 2003, Beilbys discontinued the action against Scope Data Systems. Application was made for indemnity costs, which were awarded to the company.
The assessment of costs.
19 Beilbys retained costs assessors to draw up bills of costs, conforming with the Regulations. Detailed bills were prepared in respect of the matter concerning Mr Gorczynski as well as that relating to Scope Data Systems. Each claim was identified as a separate item, given a number, the date identified, and a brief description of the service provided and the cost of that service. The format was recognisably that of a bill of costs.
20 On 15 August 2003, applications were filed in the Supreme Court, directed to Mr Peter Gorczynski in one case and addressed in the other as follows:
- "Peter Gorczynski, director of Scope Data Systems Pty Limited"
21 The applications sought the appointment of a costs assessor and annexed, in each case, the detailed bill of costs. The bill, in the case of Scope Data Systems, was accompanied by a title page which included the following: (Ex A, doc C8)
Immediately there under the following appeared:
22 The bills in each case were signed. They were accompanied by a fee calculated by the solicitors, based upon their calculation of the amount in dispute.
23 However, Beilbys, or their agent, had overlooked the requirement in s192(1) that no action could be commenced on the bill until 30 days had elapsed after delivery of the bill. A requisition was sent by the Supreme Court. As a consequence, an amended application was filed on 30 September 2003 in the same terms, annexing the same bills (Ex A, doc C12A and B).
24 A number of observations should be made about the bills of costs annexed to each application. First, they covered the entire relationship between Beilbys and the client, that is, from July 2000 in the case of Scope Data Systems, and from October 2000 in the case of Mr Gorczynski. They did so even though certain accounts had been paid by the company and by Mr Gorczynski. Secondly, the total costs sought in each bill exceeded the amounts originally claimed.
25 Not surprisingly, Mr Gorczynski immediately protested. He said this on 30 October 2003, in the context of the bill concerning Scope Data Systems:
- "We do not accept the purported Bill of Costs or assessment application and we have been advised by the Costs Assessment department of the Supreme Court to notify you of our position.
- 1. We deny that you were entitled to issue this Bill of Costs some three years after issuing the original invoices and we deny your entitlement to claim attendances that were not shown in your original invoices, memoranda or account statements. ..."
26 His letter continued:
- "6. In respect of your assessment application, it is improper of you to file an application against 'PETER GORCZYNSKI, DIRECTOR OF SCOPE DATA SYSTEMS PTY LTD' . Your firm was retained to act strictly on behalf of the company in the Local Court matter. Mr Gorczynski was not a party to that matter nor a party to the Costs Agreement."
27 In the same letter, Mr Gorczynski retreated from the position he had taken in earlier correspondence. He made the following assertion:
- "Finally, we reiterate that you did not 'have to' draw up this entirely new Bill of Costs for attendances not previously claimed nor were you entitled to do so, some three years after you issued the original invoices."
28 Mr Gorczynski, as foreshadowed, wrote to the Supreme Court. He claimed that he had been wrongly named in the amended application, attaching a copy of the costs agreement. The client was Scope Data Systems Pty Ltd. I do not believe, however, that there was any substance in Mr Gorczynski's complaint. Read as a whole, it is plain that the application was directed to the company, not Mr Gorczynski. Mr Gorczynski's name had been added whereas, strictly, the document should have referred to the Proper Officer.
29 Nonetheless, Beilbys were clearly in no mood to take any chances with Mr Gorczynski. On 19 November 2003, they filed a further amended application against Scope Data Systems Pty Ltd, providing the ACN number. They annexed the same bill of costs of 15 August 2003. The application was accompanied by a fee.
30 The bills were referred by the Court to Mr McNally, solicitor, a person authorised to assess costs. Mr McNally wrote to Beilbys on 5 December 2003. He called attention to claims made for the period after 14 March 2002, when the firm's relationship with Mr Gorczynski and Scope Data Systems ended. He also sought the following particulars: (Ex A, doc D1)
- "In respect of each item in the bill I require each person who did the work identified and excepting partners short particulars of their qualifications and experience are to be provided."
31 Mr Gorczynski wrote to Mr McNally raising a number of issues. It is significant that he reaffirmed the objection taken by Jackson Smith, solicitors, on 21 July 2003 (supra paras 13-14ff). He said this: (Ex A, doc D2)
- "1. Despite the terms of the retainer and Scope's requests, Beilby did not provide proper bills when it was acting for Scope (July 2000 - March 2002) or prior to the Local Court action in August 2002.
- 2. Despite being told that it had improperly commenced the debt recovery action, Beilby maintained the action for 12 months contrary to s192 of the Act. It also continued to refuse to provide Scope with bills in the required form when Scope indicated (letter of 12 March 2003) that it wanted to have those bills assessed before the 12-month statutory period expired.
- 3. Had Beilby issued Scope with a Bill of Costs in March 2003 or before, as was Scope's entitlement, the unpaid amount that would have been the subject of assessment was either $16,336.50 (see Statement of Claim) or $14,897.64 (see Beilby letter 15 August 2003).
- 4. The current claim by Beilby, for $23,052.17, was issued only after it conceded that its Local Court action was doomed to fail and that Scope would be seeking its costs for the unnecessary litigation. Given Beilby's conduct to date it is hardly surprising that, after receiving Jackson Smith's letters of 21 and 30 July 2003, Beilby issued an inflated Bill to cover the expected loss in Local Court."
32 For reasons not now relevant, Mr McNally ceased to act as the assessor. He was replaced by Mr Peter Scammell, solicitor.
33 On 10 February 2004, Beilbys wrote to Mr Gorczynski's solicitor stating that they did not press claims made against Scope Data System's in the period January 2000 to 1 December 2000, where the accounts had already been paid. The other accounts were pressed.
34 On 16 April 2004, an amended bill of costs was served, deleting items 1 to 177 and items 554 to 557. Mr Gorczynski objected to the bill, stating to the manager of costs assessment in the Supreme Court, the following: (Ex A, doc F8)
- " Finally , it is our understanding (confirmed by your office previously and per 6.11 of Costs Assessors Manual) that once a solicitor/client bill of costs is delivered it cannot be amended or replaced except by leave of the Court or with the client's consent. ..."
(emphasis in original)
35 He asserted, and it was common ground, that he had never consented, and the Court had not been asked by Beilbys to give leave.
The determination by the costs assessor.
36 On 11 June 2004, the assessor wrote to the parties in each matter. In the Gorczynski matter he recorded that Beilbys had sent Mr Gorczynski five separate bills. Two had been fully paid; one had been partly paid, and two were wholly unpaid. Mr Scammell determined that the assessment could not proceed in respect of the bills that had been paid. He identified an issue, in respect of which he sought submissions from the parties. The issue was expressed in these terms: (Ex A, doc G1 p2)
- "The issue is whether it was open to Beilby Poulden Costello to withdraw bills (iii), (iv) and (v) and to substitute a new bill (for this purpose that part of the Application Bill relating to the work claimed in bills (iii), (iv) and (v)."
37 Mr Scammell also drew attention to a number of authorities and correspondence which appeared to him to be relevant. He made the very sensible suggestion that, by consent, the bills could be assessed upon the basis that there would be a cap on the amount which Beilbys could recover, namely the amounts claimed in the original bills. He added this:
- "... I suggest that an agreement along these lines would have value in that the time and cost so far involved in this assessment will not be wasted and the real issues between the parties can be determined."
38 Beilbys wrote to Mr Scammell clarifying one aspect of their claim against Mr Gorczynski. They had previously conceded a "typographical error". They reaffirmed that the amount claimed was $10,485.70 (Ex A, doc G3). They also agreed with the proposal made by Mr Scammell that there be a cap on the amount claimed (Ex A, doc G4).
39 On 23 June 2004, Beilbys provided the assessor with their submissions on the issue which he had identified. They said this, in respect of the Scope Data Systems matter (Ex A, doc G6)
- "Our position is that we rely on the case of Florence Investments Pty Limited v H G Slater & Co [1975] 2 NSWLR 398. In this respect it is our submission that as our bills have not been paid by a reasonable date and we are therefore open to withdraw those bills and re-issue new bills. We are referring to the bills dated 3 August 2001, 14 February 2002 (amended) and 18 March 2002."
40 In the claim against Mr Gorczynski, Beilbys, in a letter of 1 July 2004, expressed their point somewhat differently. They said this: (Ex A, doc G7)
- "4. We further rely on the case of Florence Investments Pty Limited v H G Slater & Co [1975] 2 NSWLR 398 in supporting the position that bills (iv) and (v) are the appropriate bills to be assessed in circumstances where the client has requested such an assessment and in circumstances where we are not estopped from claiming a greater amount in circumstances where the client has made no payments."
41 On 5 July 2004, Mr Scammell again wrote to the parties. He noted that Mr Gorczynski had not provided his consent to the course suggested. It was therefore necessary to determine the preliminary issue, namely, whether Beilbys had the right to withdraw the bills it had rendered and replace them with fresh bills. Mr Scammell provided a tentative answer to that question in these terms: (Ex A, doc H1)
- " Right to withdraw bills
- While the decision in Bowen & Ors v Campbell & Anor may support the proposition that a solicitor may in any circumstances withdraw a bill which has not been paid, and substitute a new bill, even if for a higher amount, Florence Investments Pty Limited v H G Slater & Co (Florence) is clearly authority for the proposition that in calling for a detailed bill the client rejects the original bill so that the solicitor becomes entitled to withdraw that bill and substitute a new bill. In my present opinion, Florence clearly applies in this case because:-
- 1. The latest of the two original bills which remained unpaid when the Application for Assessment was lodged was dated 18 March 2002.
- 2. On 8 July 2002 Mr Gorczynski wrote to Beilby Poulden Costello as follows:-
On 12 March 2003 Mr Gorczynski wrote to Beilby Poulden Costello, in relation to various bills, as follows:-'In relation to your bills (both to me and Scope) I have asked Ms Panucci to reissue the bills in proper assessable form ...'
- '... I again ask you for a properly itemised version of those invoices in assessable form ...'
- This correspondence clearly falls within the test in Florence.
- 3. It follows that Beilby Poulden Costello were entitled to issue the bill of 15 August 2003 in substitution for the two bills which are unpaid.
- 4. It is the bill of 15 August 2003 that was lodged for assessment and it is this bill for the relevant work which must be assessed."
42 Counsel for Mr Gorczynski and Scope Data Systems has submitted that the assessor, in this paragraph, has misstated the law. Specifically, he has misstated the effect of Florence Investments Pty Limited v H G Slater & Co (1975) 2 NSWLR 398. I will return to that issue shortly. A letter in similar terms was sent by the assessor to Scope Data Systems.
43 Beilbys responded by reaffirming its previous submission. Mr Gorczynski, representing himself, sought and was given a number of extensions of time. On 20 August 2004, he provided detailed submissions in respect of both matters. His first submission was that he had asked for properly itemised versions of the invoices. His request did not entitle Beilbys to recast the entire bill. Secondly, Mr Gorczynski said that Florence Investments and the case relied upon, Bowen & Ors v Campbell & Ors (unreported, Master Malpass, 2.12.97) related to entirely different circumstances. Neither could be used to justify the course taken by Beilbys.
44 On 24 August 2004, the assessor wrote back to the company. He said this: (Ex A, doc I3)
- "I have carefully considered the submissions but I adhere to the tentative opinion expressed in my letter of 5 July 2004, namely, that Beilby Poulden Costello were entitled to issue the bill of 15 August 2003 in substitution for the three bills which were unpaid."
45 Mr Scammell stated that he proposed to proceed on the basis of the further amended application of 19 November 2003. The bill to be assessed was that of 15 August 2003, omitting items 1 to 177 and 554 to 557. On 27 August 2004, Mr Scammell adhered to his decision in the Gorczynski matter (Ex A, doc I5)
46 On 21 September 2004, Mr Gorczynski again wrote to Mr Scammell. He sought reasons for the rulings that had been made, citing a number of authorities which he suggested gave him the right to reasons. Mr Scammell responded on 23 September 2004, saying that his reasons were self-explanatory. He did not intend to elaborate (Ex A, doc I7). On 29 September 2004, Mr Gorczynski again wrote to Mr Scammell. He sought clarification of the bills to be assessed. He recited the history and ultimately said this: (Ex A, doc I9)
- "I also press for Mr Scammell's Reasons as to why he has now decided that the bills to be assessed in the two matters are the bills that were issued on 15 August 2003 rather than the respective substituted bills issued on 16 April 2004 and 23 June 2004 ."
(emphasis in original)
47 It had been assumed by the costs assessor that the bill of 16 April 2004 was the same as the bill of 15 August 2003, save for the fact that it omitted items 1 to 177 and 554 to 557. However, there were in fact differences, although they are minor. It was common ground that, if the assessment were to go ahead, it should do so on the bill annexed to the application of 19 November 2003, that is, the bill of 15 August 2003 (omitting items 1 to 177 and 554 to 557).
48 What, then, was the monetary difference between the bills originally provided by Beilbys to Mr Gorczynski and Scope Data Systems and which remain unpaid, or partly unpaid, on the one hand, and the bills which Mr Scammell proposed to assess, on the other? There is a bewildering array of calculations. Counsel for the plaintiff, in supplementary submissions, sought leave to withdraw Exhibit B and replace it with another document. I am happy that he does so. The replacement document includes, however, bills which had been paid, which the assessor has said will not form part of the assessment. A better guide, I believe, is the calculation made by counsel for Beilby's in Exhibit 1. According to that exhibit, the contrast is as follows (taking account of concessions made by Beilbys in correspondence). In the Gorczynski matter, the position is as follows:
Original accounts unpaid (H1) $12,184.70
Bill of Costs of 15.8.03 (E4) $10,905.40
Amounts in the original bills (G2 & H2) $24,327.24The new account, in other words, is $1,279.30 less than the original. In the matter concerning Scope Data Systems, the comparison in Exhibit 1 is between:
Amount claimed in account of 5.8.03 (C12B)
(excluding items not pressed, namely, 1 to 177
and 554 to 557) $28,745.62
49 So this case, which has occupied two full days of Court hearing and voluminous documentation, is concerned, on these figures, with a net additional amount of $3,139.08. That sum underlines the good sense of the suggestion by Mr Scammell that the fresh bills be assessed with a cap, which would obliterate even that small difference.
Grounds of appeal.
50 Paraphrasing the submissions of counsel for Scope Data Systems and Mr Gorczynski, the following issues have been identified as errors of law.
· First, in neither case was Beilbys entitled to withdraw the accounts which it had rendered and which remained unpaid.
· Secondly, the jurisdiction of the costs assessor is to assess and determine a bill of costs which is the subject of an application. There is no power to amend the application. The wrong party had been named. The substitution of Scope Data Systems Pty Limited for the original party was without authority under the Act. The costs assessor had no jurisdiction.
· Thirdly, the application was not accompanied by the prescribed fee. The requirements of s203(1) of the Act were therefore not met.
· Fourthly, the costs assessor had a duty to provide reasons for his determination in respect of the preliminary issue and had not done so.
51 Let me deal with each of these issues in turn.
Ground 1: The right to issue a fresh bill of costs.
52 The parties, in helpful written submissions, referred to a number of authorities. New South Wales, at one point, differed from England and the other States as to the right of a solicitor to withdraw and replace a bill of costs. However, it has now returned to the fold (cf Re Macnamara's Costs (1884) 1 WN 23; Ex Parte Steel (1898) 15 WN (NSW) 96; Re Sullivan Bros; Ex Parte Morris (1915) 32 WN (NSW) 127; Ex Parte Cameron; Re a Bill of Costs (1956) 73 WN (NSW) 393 at 396, discussed by Bowen CJ in Eq in Florence Investments Pty Ltd (supra) at pp 404-407). There is a rule (which is subject to the contractual arrangements between the parties) and there is an exception. The rule has been variously expressed. In Loveridge v Botham ((1797) 1 Bos. & Pul 49; 126 ER 772) the Court held that an attorney was not entitled to withdraw a bill of costs once delivered and substitute a bill for an increased amount (cf Re Edwin Sutherland & Co's Bill of Costs (1971) Qd R 318 at 322).
53 An elaboration upon the rule was provided in Re Thompson (1885) 30 Ch D 441 by Cotton LJ in these words: (at 448)
- "Now, it has been well established that, when a solicitor sends in his bill, he gives the client to whom he sends it in a right to have that bill taxed. That rule was laid down to prevent any attempt being made by solicitors to impose on clients, who did not know what the proper charges were, by sending in a bill which would not stand taxation, and then, when taxation was insisted on or threatened, sending in another bill which they knew could stand taxation. The rule has been carried so far that even where objections have been made to particular items of a bill delivered, and the solicitors have, with the assent of the client, taken back the bill for the purpose of reconsideration and have struck out certain items, the Court has held that the bill to be taxed must be the bill as it was originally sent in and not the bill as amended. That was so decided in In re Heather."
54 Farwell J in Re Grant, Bulcraig & Co [1906] 1 Ch Div 124, said this, referring to taxation under the Solicitors' Act 1843: (at 127)
- "There is an unbroken line of authorities since the passing of the Act which establishes that, for the purposes of taxation under the Act, and the costs thereof, the solicitor is bound by the bill that he has delivered."
55 In Florence Investments Pty Ltd v H G Slater & Co (supra), being an authority identified by the costs assessor in this case, Bowen CJ in Eq stated the rule in these terms: (at 401)
- "If a bill of costs is sent to the client without any condition being stated, then the solicitor cannot, in the case of a taxable bill, afterwards withdraw it and send in an amended bill."
56 The qualification introduced into that definition, that the bill of costs must be a "taxable bill", is important. I will return to it shortly.
57 The policy behind the rule was identified by Hoare J in Re Edwin Sutherland & Co's Bill of Costs (supra) in these words: (at 322)
- "Undoubtedly, one of the reasons for this approach is that were it not for some such general rule, it might well be open to solicitors to act oppressively in particular circumstances."
58 Tadgell J made a similar observation in Redfern v Mineral Engineers Pty Ltd [1987] VR 518, where he said this: (at 523)
- "The courts' surveillance over costs as between solicitor and client is assumed with a view to preventing any unfair advantage by solicitors in their charges to their clients. It stems, it seems, from the notion that ordinarily a solicitor is presumed to be in a position of dominance in relation to his client as a result of his presumed knowledge of the law and of what may and may not be properly charged by way of fees. Were a strict view not taken it might be open to a solicitor to overreach his client or otherwise act oppressively towards him on the matter of costs. Considerations of public policy and undue influence combined to shape the attitude of the Courts of Equity, by which the general rules in relation to taxation of costs were formulated: Loveridge v Botham (1797) 1 Bos. & Pul. 49; 126 ER 772; cf the remarks of Lowe J in Woolf v Trebilco [1933] VLR 180, at pp 191-2)."
59 The rule, however, is subject to the qualification that the solicitor and client may contractually seek to provide otherwise. Their right to do so is itself subject to the Court's power to strike down a condition which is unfair. In Re Thompson (supra) the solicitors prepared a bill which they delivered, accompanied by a letter. The letter stated that there were certain charges which, owing to haste, had not been included in the bill. They were willing, however, to accept the sum stated in full discharge of their entitlement to costs. The letter stated, however, that if the sum was not paid within eight days, the solicitors reserved the right to withdraw the bill and deliver another. The client, nonetheless, insisted upon particulars of certain charges. The solicitors then purported to withdraw the bill and replace it with another bill. The Court held (Cotton and Lindley LJJ) that they could not do so because the particular condition was one that they could not impose. The headnote, nonetheless, sets out the following principle which the Court accepted:
- "A solicitor may, when sending in his bill of costs to his client, reserve to himself the right to withdraw or alter it on condition, provided the condition is fully and clearly stated to the client: but if the solicitor has sent in his bill without any condition, or with a condition which he could not fairly impose, he cannot afterwards withdraw it or send in an amended bill."
60 In Florence Investments Pty Ltd v H G Slater & Co (supra), Bowen CJ in Eq cited Re Thompson as authority for the following proposition: (at 401)
- "It is permissible for a solicitor, when delivering a bill to reserve the right to withdraw or alter it upon a condition, provided the condition is fully and clearly stated to the client."
61 In the same case, his Honour appeared to contemplate that it would be open to the solicitor to withdraw his account in the circumstances which he discussed in the following paragraph: (at 400)
- " Whether bill was rendered on condition.
- One question raised in the correspondence between the parties, and briefly argued before me, was whether the first bill had been rendered upon a condition of 'reasonably prompt payment'. It was argued that it had been rendered on this condition, that reasonably prompt payment had not occurred, and that the defendant had withdrawn the first bill in consequence. It was also contended that the plaintiff had rejected the first account when it asked for a detailed bill. For these reasons, it was said the plaintiff could not insist on taxation of the first account."
His Honour, however, found that there was no such condition, so that the implications of that argument were not further explored (See also Re Lippiatt & Co's Bill of Costs (1998) 1 Qd R 69).
62 The rule, as mentioned, is subject to an exception. The exception was recognised in Loveridge v Botham (supra) where the Court said this: (at 772)
- "... but that if errors or real omissions in the former bill could be proved, they ought to be allowed for ..."
63 In the appeal in Re Edwin Sutherland & Co's Bill of Costs (supra), Hanger CJ adopted the following statement of principle from Re Holroyde & Smith (1881) 43 LT 722 where Jessel MR said this:
- "... there must be special circumstances to entitle a solicitor to withdraw one bill and substitute another. In my opinion under special circumstances, this might be so, that is to say, on the ordinary equitable ground of fraud, accident or mistake - such as for instance, when the solicitor has been entrapped into making charges by the misrepresentations of his client or in the case of accident, where a charge or a page had been inserted by mistake; but special circumstances there must be."
64 The submissions made by the parties made reference to Bowen & Ors v Campbell (supra), a decision of Master Malpass (as he then was). That was a case involving fraud and, therefore, fell within the exception. An employed solicitor acted for his cousin. He later left the firm and established his own practice. Before he did so, he rendered an account to his relative for $274.89. A subsequent examination of the file by his employers revealed a great deal of work for which there had been no charge. A second bill was prepared and sent to the former client ($1,539.20). The costs assessor, however, formed the view that (applying the rule) it was not open to the solicitor to withdraw his account. Master Malpass held, without elaboration, that the solicitors were entitled to proceed on the second bill.
65 Here, there was no contractual arrangement between Beilbys and either Mr Gorczynski or Scope Data Systems that entitled Beilbys to withdraw their bill. It was said by Mr Lakatos of counsel for Mr Gorczynski and the company that the case came within the rule, rather than the exception. There was no right to withdraw the original bills. The determination by the costs assessor that they could be withdrawn and replaced, relying upon the decision in Florence Investments (supra) involved, according to counsel, a misreading of that authority. There was, therefore, an error of law and the determination in each matter should be set aside.
66 Counsel for Beilbys responded that the rule had no application because it was subject to a precondition which had not been met. The precondition required that the original accounts were in taxable form (supra paras 55-56). Here, according to the defendants, they were not.
67 I will now examine that issue.
Were the original accounts in taxable form?
68 In Florence Investments (supra), Bowen CJ in Eq considered the circumstances in which accounts could be said to be in taxable form. Although the legislative context was different, his observations are useful. In the context of a lump sum assessment, he said this: (at 401/2)
- "Further, it was regarded as a general principle that, in order to constitute a bill in accordance with this legislative provision, an account must be such that it gave the client such reasonable information as would enable him to take advice as to its taxation; it need not be so explicit on the face of it as to enable a solicitor at once to say, without further inquiry, whether the charges were proper; it was material to consider what information was in the client's own possession: Haigh v Cusey (1857) 7 E & B 578; 119 ER 1360; Cook v Gillard (1852) 1 E & B 26; 118 ER 346; Cobbett v Wood [1908] 2 KB 420. Clearly, the first account was not a taxable bill according to these principles."
69 Here, as mentioned, s193(1) of the Act gives power to make Regulations with respect to "the form of, and the particulars to be included in, bills of costs". At the time Beilbys rendered the accounts to Mr Gorczynski and to Scope Data Systems, regn 22A of the Legal Profession Regulations 1994 set out the particulars which were required. That regulation was in these terms:
- " 22A Particulars in bill of costs
- (1) For the purposes of section 193(1) of the Act, the following particulars are to be included in a bill of costs:
(a) A description of the legal service provided.
(b) The total amount of the costs charged.
(c) Any intended claim for interest under section 190 of the Act if the costs are not paid (including the rate of interest).
(d) The work done in providing the legal service.
(e) The period over which that work was done.
(f) The identity of the persons who did that work (including the position of the persons eg partner, associate).
(h) The facts relied on to justify the costs charged by reference to the above, the practitioner's skill, labour and responsibility, the complexity, novelty or difficulty of the matter, the quality of the work done or any other relevant matter.(g) The basis on which the costs have been calculated and charged (whether on a lump sum basis, an hourly rate basis, an item of work basis, a part of proceedings basis or other basis).
- (2) However, the particulars referred to in subclause (1)(d)-(h) need not be included in the bill of costs if:
(b) the bill of costs refers to the relevant costs agreement or disclosure document.(a) the total amount of costs charged is the amount, or an amount calculated on the basis, set out in a costs agreement for the legal service made under Division 3 of Part 11 of the Act or disclosed in accordance with Division 2 of that Part, and
- (3) A bill of costs may comprise more than 1 document."
70 I have already described the original accounts forwarded by Beilbys to Mr Gorczynski and to the company (supra para 3). They were not a lump sum account. They provided significant detail in the following format, which I have selected at random (Ex A, doc A3).
| 17.05.01 | attending Local Court on Notice of Motion | 4.0 |
| 25.05.01 | telephone attendance on you | .1 |
| 25.05.01 | letter to you | .1 |
| 25.05.01 | letter to Counsel | .1 |
| 29.05.01 | telephone attendance on you | .1 |
| 29.05.01 | receiving and perusing letter from Plaintiff's solicitors | .1 |
71 The time was calculated in 6 minute units. The costs were the product of the number of units and the hourly rate.
72 The replacement bill of costs, the subject of this action, was in the following format:
| Item No. | Date | Particulars | Amount |
| 289 | 17/05/01 | Attendance at court before Magistrate Forbes instructing Counsel on hearing of Notice of Motion when Defendant's Notice of Motion dismissed with costs to be argued at hearing of substantive hearing together with hearing of Plaintiff's Notice of Motion - 29/1p | 725.00 |
| 290 | 17/05/01 | Travelling to court/conference and return - 3/1p | 75.00 |
| 291 | 25/05/01 | Telephone attendance on client re provision of bundle of documents - 1/cl | 25.00 |
| 292 | 29/05/01 | Telephone attendance on client re provision of bundle of material to prepare chronology and statement - 1/1p | 25.00 |
73 The bill also included (as required by regn 22A(1)(h)) a four page narrative describing the nature of the action and particular features of the litigation, enabling the assessor to have an appreciation of the care and skill exhibited by the solicitors.
74 Jackson Smith, solicitors, in the letter on behalf of Scope Data Systems of 21 July 2003 (supra para 16), identified three areas where the original accounts failed to comply with the mandatory terms of the regulation. As mentioned, this letter identified regn 45 of the 2002 Regulations which did not come into force until 1 September 2002. Transposing the paragraph numbers identified to the identical paragraphs which appear in regn 22A, which was then in force, the solicitors for Scope Data Systems suggested that the bill failed to meet the requirements of regn 22A(1)(f), (g) and (h). Certainly the original accounts did not include any narrative as required by regn 22A(1)(h). Nor, in many cases, did the accounts identify the person who performed the work (regn 22A(1)(f)).
75 The original bill therefore did not comply with the requirements of the regulation. Was it, however, capable nonetheless, of being characterised as a taxable bill for the purposes of the rule? It is clear from Florence Investments (supra para 68) that it may still be a bill of costs for the purposes of s192(1), even where some enquiry is necessary to clarify certain items. It will be noticed that the costs assessor, Mr McNally, required an identification of the persons who performed each aspects of the work and their qualifications and experience (supra para 30). For the accounts to be capable of being characterised as a taxable bill, there must be substantial compliance with the Regulations.
76 Here, reasonable minds may reasonably differ as to whether the original bills did or did not substantially comply. The omission of any narrative and the failure in many cases to identify who performed the work (although one assumes that it most cases it must have been Ms Panucci) were substantial departures from the requirements of the Regulations. I am inclined to think that the original accounts did not substantially comply.
77 However, ultimately, Mr Gorczynski and Scope Data Systems must show an error of law on the part of the costs assessor in his determination. The assessor correctly identified the issue in his letter of 11 June 2004 (Ex A, doc G1), namely, whether it was open to Beilbys to withdraw certain bills and substitute others (supra para 35). The assessor referred in his letter to the relevant authorities, including Florence Investments (Ex A, doc H1). His statement of the ratio of Florence Investments is cryptic and arguably inadequate. He does not, in terms, advert to the precondition, which is part of the rule, that the original bill must be in taxable form. However, the assessor's words ("in calling for a detailed bill the client rejects the original bill") (supra para 41) may be seen as a reference, on the one hand, to a taxable bill ("a detailed bill") and, on the other hand, the original bills which, by implication, were not in taxable form. But whether that be right or wrong, the plaintiff submitted, and I accept, that the assessor did address the issue. In his recital of relevant facts, drawn from voluminous correspondence, he selected extracts from Mr Gorczynski's letters in which it had been asserted that the bills were not in assessable form. For convenience, I repeat part of what the costs assessor said in the document in which he outlined his tentative views: (supra para 41) (Ex A, doc H1)
- "2. On 8 July 2002 Mr Gorczynski wrote to Beilby Poulden Costello as follows:-
On 12 March 2003 Mr Gorczynski wrote to Beilby Poulden Costello, in relation to various bills, as follows:-'In relation to your bills (both to me and Scope) I have asked Ms Panucci to reissue the bills in proper assessable form ...'
- '... I again ask you for a properly itemised version of those invoices in assessable form ...'
- This correspondence clearly falls within the test in Florence."
78 Indeed, it was, I believe, reasonably clear on the correspondence which was before the assessor that, by August 2003, both parties accepted that the original bills were not in assessable form. It was within that context that the assessment process began. Certainly that had been the position of Mr Gorczynski from the time his relationship with the solicitors ended. He wanted the bills reissued. He wanted "a properly itemised version of those invoices in assessable form, including an item number against each attendance; who performed the attendance (if not Ms Panucci) and the cost of each attendance." (Ex A, doc C6) (supra para 10). His position was put beyond doubt by his solicitors on 21 July 2003 (Ex A, doc C7) (supra paras 14-16). The shortcomings, in terms of the requirements of the Regulations, were identified. Beilbys were asked whether they intended to discontinue the proceedings. Shortly thereafter, in August 2003, they did so.
79 This sequence suggested that Beilbys recognised the force of their opponent's argument. They recognised that the accounts were not in taxable form and that they would fail in their recovery action. Discontinuance inevitably required them to pay the costs of Scope Data Systems. Indeed, costs were awarded on an indemnity basis. That must have been a bitter pill. It is inconceivable that they would have taken that course had they believed that they would succeed in their recovery action. Yet, on any view, some money was owing. By 15 August 2003, Beilbys had fresh bills drawn which complied with the Regulations.
80 That was the inference I drew, having read the documents and heard submissions, by the end of the hearing. The parties were given leave to provide supplementary written submissions on certain issues. Both counsel provided those submissions. Counsel for the plaintiff, in his submission, canvassed a number of issues. One issue concerned the sequence of events which I have just described. He suggested alternative inferences.
81 Counsel for Beilbys also provided supplementary written submissions in response to my invitation. Because time was short, neither counsel had time to exchange submissions before they were sent to the Court. Counsel for Beilbys, having read the supplementary submissions of counsel for the company and Mr Gorczynski, provided yet more submissions. He protested that the plaintiff's submissions had canvassed issues in respect of which no leave had been given. He asserted that they should either be disregarded or, alternatively, his client should be given leave to rely upon an affidavit of Ms Panucci addressing one of the matters raised by his opponent.
82 The supplementary submissions on behalf of Mr Gorczynski and the company were outside the areas reserved by me for such submissions. However, I make no criticism of counsel. The issues were not well defined in the hurry to finish the case at the end of a long day. The solicitors for Mr Gorczynski sought a further hearing to sort out whether Beilbys could rely upon the affidavit of Ms Panucci. The matter was relisted on 26 August 2005. Having heard submissions, I refused leave to Beilbys to rely upon that affidavit. I nonetheless received the additional submissions from counsel for Mr Gorczynski and the company, and the further submissions on that issue by the defendants in response.
83 Turning to those submissions, counsel for Mr Gorczynski and the company emphasised the fact that the proceedings against Mr Gorczynski were discontinued in May 2003. The letter from Jackson Smith of 21 July 2003 was sent in the context of the action by Beilbys against Scope Data Systems. It could not, therefore, according to counsel for the company and Mr Gorczynski, have influenced Beilbys in respect of the Gorczynski matter. The sequence suggested rather that the process of preparing fresh bills began somewhat earlier, possibly in May. There was no evidence that the defendants ever conceded that the original bills were not in taxable form. On the contrary, they repeatedly insisted in earlier correspondence that they were properly itemised accounts. They said much the same again after August 2003.
84 However, I am not persuaded. The accounts rendered by Beilbys to Mr Gorczynski were in the same format as those rendered to the company. The defects in the accounts which Jackson Smith identified in the Scope Data Systems matter were present in the accounts relating to the Gorczynski matter. Although Beilbys may not have admitted, in terms, that the bills were not in taxable form, their actions said it for them. In the face of repeated assertions from Mr Gorczynski, the company's counsel and its solicitors, Beilbys discontinued the proceedings against the company in August 2003.
85 That material, including that sequence, was before the costs assessor. It was open to the costs assessor to determine that the original accounts were not in taxable form. The rule, as I have termed it, therefore did not apply. The solicitor could withdraw the original bills and provide a fresh assessment in taxable form. Whilst the assessor's short statement of the ratio in Florence Investments is perhaps less than complete, when it is taken in conjunction with the paragraphs which followed (in the document H1) (supra para 41), I believe it to be adequate as an indication that he addressed the appropriate sequence of questions in order to make the determination he did.
86 It is not necessary that I deal with an alternative argument advanced on behalf of Beilbys that, by reason of the annotation on each of the original accounts "E&OE", the fresh assessments can be seen as falling within the exception.
87 I believe there was no error of law in the determination that was made. I therefore dismiss the first ground.
Grounds 2 and 3: Jurisdiction of the assessor.
88 The second and third grounds call attention to the sequence of applications made by Beilbys in the matter concerning Scope Data Systems. The original application was allocated a number 91553 of 2003 and filed on 8 September 2003 (Ex A, doc C10). As described above, it named "Peter Gorczynski, director of Scope Data Systems Pty Limited" as respondent. It annexed the bill of costs which clearly identified the litigation (Re: Scope Data Systems Pty Ltd - ats - BDO Nelson Parkhill), and included certain directions addressed to "The Director, Scope Data Systems Pty Limited".
89 The application was met with a requisition from the Costs Assessment Manager of the Supreme Court (Ex A, doc C11). The solicitors, or their agents, had overlooked the requirement in s192(1) of the Act to allow thirty days to elapse after the bill of costs had been served before commencing proceedings. A further application, labelled "amended application" was filed on 30 September 2003 (Ex A, doc C12A). It was in the same form as the original application and was given the same file number. It will be recalled that Mr Gorczynski protested about his name appearing on the application. On 19 November 2003, a further amended application was filed, this time naming "Scope Data Systems Pty Ltd ACN 0001 384 381" as respondent. The same bill of costs (addressed in the manner set out above) and dated 15 August 2003, was annexed.
90 Counsel for Scope Data Systems drew attention to s203(1) which is in these terms:
- " 203 How is an application to be made?
- (1) An application for assessment is to be made in accordance with the Regulations and is, subject to subsection (4), to be accompanied by the fee prescribed by the Regulations."
91 The argument put on behalf of Scope Data Systems is that the wrong party had been named initially, namely, Mr Gorczynski, instead of the company. There is, according to counsel for the company, no power to amend. That notwithstanding, an amended and subsequently a further amended application was filed and accepted by the registry. The further amended application (dated 19 November 2003) annexed the same assessment of costs, which has been identified by the costs assessor as the bill to be assessed. It was not, however, accompanied by the fee prescribed by the regulation. Although a fee was paid, it had been calculated by Beilbys based upon their belief as to the amount in dispute. They subtracted from the total bill the monies that had already been paid by the company. The assessor, however, ultimately took the view that, because Scope Data Systems objected to the entire bill, the total amount of the bill should determine the prescribed fee. He called upon Beilbys to pay the difference, which they did. The end result, according to Scope Data Systems, is that the application was not accompanied by the prescribed fee, as required by s203(1) of the Act. Reference was made to Brierley v Reeves (2001) 51 NSWLR 689.
92 There is no substance in these arguments. In my view, as I have stated, Scope Data Systems was identified with sufficient particularity in the first application and in the replacement (the amended application) of 30 September 2003. The amendments which have been made successively on 30 September 2003 and 19 November 2003 did not change the party. They were by way of clarification, responding to a requisition from the manager. The application was accompanied by a fee, calculated by the solicitors in accordance with their belief as to the amount in dispute, using the formula in the Regulations. The fact that the assessor took a different view and required an additional sum, did not vitiate the application, nor deprive the assessor of jurisdiction. The additional sum was paid.
Ground 4: The duty to provide reasons.
93 Complaint is made by Mr Gorczynski and Scope Data Systems that, when determining that Beilbys had the right to withdraw the original assessments and substitute fresh assessments, the assessor gave "insufficient reasons". He provided a tentative opinion (Ex A, doc H1) (supra para 41), invited submissions and having received them, simply adhered to the ruling he had foreshadowed (Ex A, doc I3) (supra para 44). The costs assessor then resisted repeated attempts by Mr Gorczynski to have him provide an elaboration (Ex A, doc I9) (supra para 46).
94 Counsel for Mr Gorczynski and the company referred to s208JAA(1) of the Act, which requires a costs assessor to provide "a statement of reasons" for his determination, when issuing a certificate. Clause 61(2) of the Legal Profession Regulations 2002 identifies the particular matters which the reasons must address. In respect of disputed costs, for instance, the assessor must provide an explanation of the basis upon which he has assessed the costs and how the submissions of the parties have been dealt with (cl 61(2)(d)).
95 However, s208JAA(1) and the Regulations apply at the end of the process, when a final determination is made and a certificate issued. The costs assessor, Mr Scammell, is at the threshold of the assessment process. He was simply dealing with a preliminary issue.
96 Counsel for Mr Gorczynski and Scope Data Systems advanced a further argument. It was suggested that there was a duty to give reasons that could be implied from the provisions of the costs regime, including the right of appeal under the Act. Even if that implication were not drawn, there was a common law duty to give reasons, as established by Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Pettitt v Dunkley (1971) 1 NSWLR 376 and more recently in Stoker v Adecco Gemvale Constructions Pty Ltd & Anor [2004] NSWCA 449. Counsel quoted from the last of these cases where the Court of Appeal (Mason P, Sheller and Santow JJA) said this:
- "[41] It is clear that the duty to give reasons is a necessary incident of the judicial process. Without adequate reasons, justice has not been seen to be done, so that failure to give adequate reasons may be an error of law; Pettitt v Dunkley [1971] 1 NSWLR 376; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at pp 278-9 per McHugh JA; Mifsud v Campbell (1991) 21 NSWLR 725; Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430. But the duty does not require the trial judge to spell out in minute detail every step in the reasoning process or refer to every single piece of evidence. It is sufficient if the reasons adequately reveal the basis of the decision, expressing the specific findings that are critical to the determination of the proceedings."
97 That passage, and these cases, deal with the requirement of a judicial officer to provide reasons. The costs assessor is not a judicial officer. He is performing an important administrative function in which he is given a statutory discretion. I am not persuaded that he was obliged to give reasons (Public Service Board v Osmond (1986) 159 CLR 656). But, even if he was, I believe the costs assessor sufficiently identified the basis of his ruling.
Extension of time.
98 The plaintiffs, Mr Gorczynski and Scope Data Systems, did not lodge their respective appeals against the assessor's determinations within the time prescribed by the rules. They required, as they acknowledged, an extension of time. Having dealt with the merits and having been unpersuaded that either party has established an error of law by the costs assessor, it is unnecessary for me to deal with the applications to extend time.
Order.
99 I make the following orders:
1. In the action by Mr Peter Gorczynski against Beilbys (2004/13454), the amended summons is dismissed with costs.
2. In the action by Scope Data Systems against Beilbys (2004/13455), the amended summons is dismissed with costs.
07/09/2005 - Typographical error - Paragraph(s) 52
8
5
3