Kennett v Muc t/as GH Healey & Co
[2013] NSWSC 119
•26 February 2013
Supreme Court
New South Wales
Medium Neutral Citation: Kennett v Muc t/a GH Healey & Co [2013] NSWSC 119 Hearing dates: 21 February 2013 Decision date: 26 February 2013 Before: Adamson J Decision: 1. Dismiss the plaintiff's claims for relief in prayers 1-5 of the summons.
2. Order the plaintiff to pay the costs of the proceedings in so far as they relate to the claims for relief in prayers 1-5 of the summons.
3. Stand over the plaintiff's claim for relief under prayer 6 of the summons to a date before the Registrar.
Catchwords: ADMINISTRATIVE LAW- judicial review- subject matter, scope and purpose of legislation inform the identification of relevant considerations when not stipulated in Act
PRACTICE AND PROCEDURE - costs assessment-whether assessment invalid - objection must be rationally capable of bearing on fairness and reasonableness of assessmentLegislation Cited: Legal Profession Act 2004- Division 11
Legal Profession Regulation 2005- cl 125
Supreme Court Act 1970- s 69Cases Cited: -Berwick v Kennett [2010] NSWIRComm 41
-Brierley v Reeves [2001] NSWCA 189; (2001) 51 NSWLR 689
-Currabubula v State Bank of NSW [2000] NSWSC 232
-Gorczynski v Leichhardt Council [2007] NSWSC 202
-Kennett v Industrial Court of NSW [2010] NSWCA 307
-Kennett v Mayrana Pty Ltd (No 9) [2008] NSWIRComm 106
-Kennett v Mayrana Pty Ltd (No 10) [2008] NSWIRComm 207
-Kennett v Mayrana Pty Ltd (No 11) [2009] NSWIRComm 99
-Kennett v Mayrana Pty Ltd (No 12) [2009] NSWIRComm 116
-Kennett v Mayrana Pty Ltd (No 13) [2010] NSWIRComm 29
-Kennett v Mayrana Pty Ltd (No 14) [2010] NSWIRComm 64
-Khan & anor v Jenni Mattila & Co Lawyers [2011] NSWSC 71
-Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24
-Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
-Tasker v Fullwood [1978] 1 NSWLR 20Category: Principal judgment Parties: Keith Franklin Kennett (Plaintiff)
Katarina Muc T/as GH Healey & Co. Hurstville (First Defendant)
Gregory Harrison Healey T/as GH Healey & Co Sydney (Second Defendant)
The Manager, Costs Assessment (Third Defendant)Representation: Counsel:
AJ McQuillen (Plaintiff)
MJ Darke (First & Second Defendants)
Solicitors:
Frank Legal (Plaintiff)
K & L Gates (First & Second Defendants)
File Number(s): 2012/242441 Publication restriction: Nil
Judgment
Introduction
By Summons filed 3 August 2012 the plaintiff seeks orders against the first and second defendants (the Solicitors) including an order setting aside a decision of the Manager, Costs Assessment, made on 23 July 2012 (the Refusal), not to extend the time for him to apply for a review of a determination of a costs assessor in relation to the Solicitors are entitled to receive from him (the Determination) under costs orders made by the Industrial Court and the Court of Appeal in 2010 (the Costs Orders).
The plaintiff contends, necessarily in the alternative:
(1) The Determination is invalid (prayers 4 and 5 of the summons) (the Invalidity Case); and
(2) The Refusal ought be set aside (prayers 1, 2 and 3 of the summons) (the Judicial Review Case).
By order made on 14 August 2012, the relief claimed in prayer 6 of the summons, equitable set-off, was excluded from consideration at the hearing on 21 February 2013.
Facts
In 2003, the plaintiff and others brought proceedings in the Industrial Court against a number of respondents in relation to the sale of both of Excelsior College, which taught English to overseas students as a second language, and post-sale consultancies. The plaintiff alleged that one such post-sale consultancy had been unlawfully terminated and in breach of which he alleged he had been underpaid.
The Solicitors acted on behalf of the plaintiff and other applicants in the Industrial Court proceedings. They briefed Dr John Berwick as counsel. The proceedings were heard by Schmidt J, who gave judgment on 27 May 2008 (Kennett v Mayrana Pty Ltd(No 9) [2008] NSWIRComm 106) and made final orders on 4 November 2008 (Kennett v Mayrana Pty Ltd (No 10) [2008] NSWIRComm 207). The question of costs was reserved.
By notice of motion, the plaintiff sought costs orders against the Solicitors and Dr Berwick. Schmidt J gave judgment on costs on 29 June 2009: Kennett v Mayrana Pty Ltd (No 11) [2009] NSWIRComm 99. Relevantly, her Honour ordered the second defendant to repay to the plaintiff the costs the plaintiff was obliged to pay to the respondents in relation to a particular expert witness. On 24 July 2009, Schmidt J ordered the Solicitors and Dr Berwick to pay the plaintiff's costs of the motion: Kennett v Mayrana Pty Ltd (No 12) [2009] NSWIRComm 116.
Various applications were made for leave to appeal from the orders of Schmidt J, on both the substantive issues in the proceedings and as to costs. On 9 March 2010, the Full Bench of the Industrial Court, relevantly refused the plaintiff's and allowed the Solicitors' applications for leave to appeal: Kennett v Mayrana Pty Ltd (No 13) [2010] NSWIRComm 29.
On 1 April 2010, the Full Bench allowed the Solicitors' appeal and substituted an order that the plaintiff and the Solicitors bear their own costs of the motion for costs: Berwick v Kennett [2010] NSWIRComm 41.
On 24 May 2010 the Full Bench ordered the plaintiff to pay the Solicitors' costs of his unsuccessful application for leave to appeal to which they were parties (IRC 2009/1050), and of their successful appeal against the order as to the costs of the plaintiff's costs motion below: Kennett v Mayrana Pty Ltd (No 14) [2010] NSWIRComm 64.
The plaintiff then commenced proceedings by summons in the Court of Appeal in which he sought relief in respect of the orders made by the Full Court. On 17 November 2010, the Court of Appeal dismissed the proceedings with costs: Kennett v Industrial Court of NSW [2010] NSWCA 307.
As a result of the various proceedings referred to above, the Solicitors had the following costs orders in their favour against the plaintiff:
(1) an order that he pay their costs of his unsuccessful application for leave to appeal from the costs orders of Schmidt J (IRC 2009/1050): Kennett v Mayrana Pty Ltd (No 14) [2010] NSWIRComm 64;
(2) an order that he pay their costs of their successful appeal from the costs order Schmidt J made on the plaintiff's costs motion (IRC 2009/1286): Kennett v Mayrana Pty Ltd (No 14) [2010] NSWIR Comm 64; and
(3) an order that he pay their costs of his unsuccessful Court of Appeal proceedings: Kennett v Industrial Court of NSW [2010] NSWCA 307.
(4) (the Costs Orders)
Under cover of a letter dated 23 June 2011, the Solicitors served on the plaintiff a proposed application under s 353(1) of the Legal Profession Act 2004 (NSW) (the Act) for an assessment of party/party costs which the they were entitled to receive pursuant to the Costs Orders. The plaintiff's unchallenged evidence is that he received the letter on 7 July 2011.
By letter dated 20 July 2011, Mitchell Lawyers, the plaintiff's then solicitors, wrote to Middletons, the Solicitors' solicitors and alleged that the Solicitors owed the plaintiff various amounts for unpaid professional services and that the plaintiff had costs orders in his favour against them. They informed Middletons that they were seeking the plaintiff's instructions as to quantification of the monies said to be owing for professional services and asked Middletons to desist from proceeding to assessment of the Solicitors' costs, contending that to do so would be "an abuse of process".
On 8 September 2011, no further correspondence having passed in the interim, the Solicitors lodged an application for assessment of party/party costs (the Application) with the Manager, Costs Assessment (the Manager). The total amount of costs payable was said to be $131,478.24. Paragraph 7 of the application stated that no objection had been received by the Solicitors before the application was lodged. Paragraph 9 stated that there was no reasonable prospect of settlement of the matter by mediation.
Under cover of letter dated 12 September 2011, the Application was served on Mitchell Lawyers. The letter stated that the Solicitors did not accept the assertions set out in the letter of 20 July 2011. On the same day, Mitchell Lawyers wrote to Middletons alleging that the Solicitors owed the plaintiff $435,719.00 excluding interest for services rendered and that this amount did not include monies owing to the plaintiff by reason of costs orders.
On 14 September 2011, the Manager referred the Application to a costs assessor (Costs Assessor) pursuant to s 357(1) of the Act, and notified the plaintiff. On 22 September 2011, the Costs Assessor wrote to the parties inviting submissions with respect to the assessment on or before 20 October 2011 and noted that in the absence of any communication by then he might proceed to determine the matter on the basis of the information he then had.
On 4 October 2011, Mitchell Lawyers wrote to the Costs Assessor objecting "as a preliminary matter" to the costs assessment proceeding, on the basis of the matters set out in their letter of 20 July 2011.
On 6 October 2011, the Costs Assessor responded to Mitchell Lawyers stating that the matters raised were not a basis upon which to delay the assessment and that he had no such power. He added that unless the application for assessment was withdrawn he would proceed to assess costs on the basis of the information before him.
On 17 October 2011, Mitchell Lawyers wrote to the Manager and contended that, as the Solicitors had failed to advise the Court or the Costs Assessor of the plaintiff's objection to the costs assessment contained in the letter of 20 July 2011, either the referral to the Costs Assessor should be revoked under s 357 of the Act or that the Application was incapable of being referred because it did not comply with s 354 of the Act and the Legal Profession Regulation 2005 (NSW) (the Regulations).
By letter dated 18 October 2011, the Manager wrote to Mitchell Lawyers in the following terms:
Application - No Jurisdiction
1. In response to the costs respondent's letter of 17 October 2011 I advise that I do not intend to revoke the assignment from Mr Webley.
2. Please note that I have not provided a copy of the letter of 17 October 2011, noting copies were sent to the cost applicant and Mr Webley, if you do not have a copy please advise and I will provide it. Also, I have dispensed with my ordinary practice in applications of this kind of requesting submissions from the assessor and the costs respondent for the reasons set out below.
3. Whilst it is possible that there is some irregularity in the application by not stating there was any objection to the application, that irregularity is relatively minor and cured as the objection was provided to Mr Webley on 4 October 2011. I do not consider the application to be invalidly made.
4. Once I refer an application to an assessor as I am loathe to interfere in assessments and I leave the management and determination of an application to the discretion of an assessor. In this case, I note that Mr Webley made a determination on the objection and as far as I can see he is exercising his discretion within the bounds of his obligations and duties as an assessor, not sufficient enough for to interfere. Any dissatisfaction with this outcome may ground a review application.
5. A copy of this letter has been sent to both parties and to Mr Webley.
Manager, Costs Assessment
Neither the plaintiff nor the Solicitors provided any further submissions to the Costs Assessor. On 29 November 2011, the Costs Assessor issued and forwarded to the Manager (and, apparently, to the plaintiff):
(1) a Certificate of Determination of Costs pursuant to s 368 of the Act setting out his determination of the Application under s 367A of that Act, which was that a fair and reasonable amount of costs to be paid to the Solicitors was $125,188.64;
(2) a Certificate of Determination of Costs of Costs Assessment pursuant to s 369(5) of the Act setting out his determination of the costs of the Assessment and by whom those costs were to be paid under ss 369(2) and 369(2A) of the Act, which was that the costs were $3,624.78 and to be paid by the plaintiff; and
(3) a Statement of Reasons pursuant to s 370 of the Act.
Relevantly, the Costs Assessor, said, at [5] of the Statement of Reasons:
The Costs Respondent by letter to the Manager Costs Assessment and the Assessor took Objection to the Assessment proceeding (refer in particular to the letter dated 20th of July 2011 from Mitchell Lawyers to Middletons). The Respondent was given ample opportunity to make any further submissions. The Assessment proceeded on the basis that the whole of the costs sought were objected to.
On 5 December 2011, Mitchell Lawyers wrote to the Manager enclosing, for the first time, a copy of the plaintiff's actual objections to the costs claimed by the Solicitors, and requesting consideration of that material "before final determination and costs certificate is issued".
I pause to interpolate that consideration of the material was not, in fact, possible at this point because the Determination had already been made and, by force of s 372 of the Act, was binding on all parties.
On 13 March 2012, the Manager sent the Certificate of Determination of Costs, the Certificate of Determination of Costs of Costs Assessment and the Statement of Reasons to the parties.
On 27 March 2012, the plaintiff instructed Mitchell Lawyers to apply to the Manager for a review of the Determination.
On 11 April 2012, Mitchell Lawyers, in purported compliance with s 373(5) of the Act, wrote to Middletons giving notice of the plaintiff's application for review.
On 19 April 2012, the plaintiff applied to the Manager for a review of the Determination (although not his determination of the costs of that assessment) under s 373 of the Act (the Review Application). It is common ground that the Review Application was out of time, having been made more than 30 days after 13 March 2012 when the Certificate of Determination of Costs had been forwarded to the parties: s 373(1) of the Act. In the accompanying affidavit sworn 19 April 2012, Simon Paul Mitchell (of Mitchell Lawyers) sought:
"the indulgence of the court to accept [it] slightly beyond the 30 day period"
On 24 April 2012, the Manager wrote to the parties advising that the plaintiff's Review Application was out of time, requesting an application to extend time within 7 days and giving the Solicitors a further 7 days to provide submissions in reply to that application. By letter dated 29 April 2012, Mitchell Lawyers submitted the plaintiff's application for an extension of time to the Manager and attached the Review Application and the plaintiff's 5 December 2011 objections to the costs claimed by the Solicitors.
By letter dated 1 May 2012, Middletons wrote to the Manager objecting to matters raised by the plaintiff in both his Review Application and his application for an extension of time on the ground that they went beyond the evidence which had been received by the Costs Assessor (contrary to s 375(3) of the Act) and related to matters, such as issues of alleged indebtedness between the parties, which had not, and could not have, been the subject of the Determination.
On 4 May 2012, Middletons provided written submissions to the Manager that addressed the plaintiff's application for an extension of time and, more generally, his Review Application.
On 23 July 2012, the Manager refused the plaintiff's extension of time application with reasons.
The relevant statutory scheme and applicable legal principles
Section 353(1) permits those entitled to receive costs pursuant to a costs order to apply to the Manager for their assessment. Section 354(1)(a) relevantly provides that an application for a costs assessment must be made in accordance with the regulations, if any.
Clause 124(1) of the Legal Profession Regulations 2005 (the Regulations) contains the requirement laid down for the purposes of section 354(1)(a) that an application for assessment be made in the approved form.
Clause 125(1) sets out a procedure which applies to applications for assessment which are made, as here, by persons to whom costs are payable. It relevantly provides that the person proposing to make the application is to complete the application and send it to the respondent to the application advising that person that any objection must be lodged with the applicant 21 days after the person receives the notice. The applicant is then to lodge any objection received before lodging the application. If no objection is received, the applicant is to certify that no objection was received by the applicant before the application was lodged. The applicant is obliged to forward any objection received after the application has been lodged to the costs assessor to whom the application for assessment has been referred, together with the applicant's response to such objection, if any.
Section 357(1) is a mandatory provision that provides that the Manager is to refer each application for costs assessment to a costs assessor to be dealt with under the Division. Section 358(1) confers power on the costs assessor to require production of documents and the provision of information from the parties to the assessment. Section 359(1) requires a costs assessor to provide a reasonable opportunity to the parties to the assessment for the provision of written submissions.
Section 364 sets out the matters to be considered by the costs assessor in assessing legal costs payable as a result of an order made by a court or tribunal. The matters that must be taken into account are whether it was reasonable to carry out the work to which the costs relate, whether or not the work was carried out in a reasonable manner and what is a fair and reasonable amount for the costs for the work concerned. This provision is to be contrasted with section 363 that deals with assessment of legal costs as between client and solicitor and which lists additional matters which may be taken into account, including whether a lawyer has complied with relevant legislation or legal profession rules.
Section 367(1) sets out how a costs assessor is to determine an application for assessment of costs payable as a result of an order: namely, by making a determination of the fair and reasonable amount of those costs. The obligation to make a determination is provided for by s 367A. Once the determination is made, the costs assessor is obliged to issue a certificate under s 368. Section 370 requires reasons to be given.
Section 373 provides that any party to a costs assessment who is dissatisfied with a determination may, within 30 days after the s 368 certificate has issued or within such further time as the Manager may allow, apply for a review of the determination. An application for review must ensure that notice of the application for review is given to the other parties to the assessment not less than 7 days before the application is made.
The application for review is then referred to a panel that comprises two costs assessors: s 374. Section 375 provides that the review panel has the same functions of the costs assessor to make a determination. The panel then reviews the determination on the basis of the evidence and submissions that were before the costs assessor, unless the panel determines otherwise.
The Manager's power to extend the time for making an application for review of a determination by a costs assessor is contained in s 373(1) of the Act, which provides that such an application is to be made within 30 days after the certificate setting out the determination has been forwarded to the parties "or within such further time as the [Manager] may allow".
Section 384 provides that a party to an application for costs assessment who is dissatisfied with a decision of a costs assessor as to a matter of law may appeal to the District Court against the decision. The District Court may make such determination as ought to have been made or remit its decision on the question to the costs assessor and order the costs assessor to re-determine the application.
The following can be distilled from the statutory scheme summarised above. By reason of the language of s 357(1) the Manager has no discretion whether to refer an application to a costs assessor. A costs assessor is authorised only to assess and determine a fair and reasonable amount of costs for the work concerned. A costs assessor has no power to determine any wider issue or dispute between the parties or any matter extraneous to the fairness and reasonableness of the amount of costs for the work concerned.
Were the word "objection", as it appears in cl 125, accorded its ordinary English meaning it would have the effect that any expression of disgruntlement that passed between the respondent and the applicant after service of the draft application would have to be forwarded to the Manager and in turn to the costs assessor even in circumstances where, as here, it could not be taken into account by the costs assessor since it does not address any matter germane to the costs assessment.
In my view, the context in which the word "objection" appears in cl 125(1) is sufficient to indicate that its ordinary English meaning ought be confined. The word "objection" in cl 125 of the Regulations means an objection that is rationally capable of bearing on the fairness and reasonableness of particular items of costs covered by the costs order. The word "objection" in this context does not include general objection to making payment based on, for example other amounts owing between the parties, extraneous to the work said to have been done which is covered by the costs order.
An objection that is made before the application is lodged with the Manager does not have any greater or lesser weight or effect than either one which is made after the Manager has referred the costs assessment to a costs assessor or one which is submitted in response to an invitation from the costs assessor.
The review conducted by the panel is a review on the merits. The panel will usually determine the review on the basis of the material which was before the costs assessor.
The appeal to the District Court arises only on a matter of law. The District Court does not engage in merits review of the application.
The Manager's decision whether to extend time to apply for review of a costs assessment is an administrative one, which is subject to judicial review: Khan & anor v Jenni Mattila & Co Lawyers [2011] NSWSC 71 at [39] per Garling J.
This Court has power under s 69 of the Supreme Court Act 1970 to engage in judicial review of administrative decisions made under NSW legislation. In engaging in such judicial review, the Court is concerned with the legality as opposed to the merits of the decision. Whether the Court grants relief under s 69 is a discretionary matter. The existence of other avenues of relief for which Parliament has provided is a relevant matter in the exercise of the discretion.
The Invalidity Case: the alleged invalidity of the costs assessment
In order to decide whether the plaintiff succeeds on its invalidity case, four questions arise, the short answers to which follow:
(1) Did the Application comply with the Act and the Regulations? Yes.
(2) Did the Assessment comply with the Act and the Regulations? Yes.
(3) Does any non-compliance make the Determination invalid? Not applicable, but, in any event, no.
(4) Was there a denial of natural justice that preceded the Determination? No.
(5) If so, ought the declaratory relief claimed be granted? Not applicable, but in any event the declaratory relief ought be refused because the plaintiff failed to avail himself of the alternative avenues of relief provided for by the Act.
Did the Application comply with the Act and the Regulations?
The plaintiff submitted that the letter of 20 July 2011 constituted an "objection" within the meaning of cl 125 of the Regulations and that since it was not attached to the Application, the Application did not comply with cl 125.
The letter of 20 July 2011 does not raise any matters concerning any of the items in the 526 items of the bill attached to the draft application sent on 23 June 2011. All it does is make allegations concerning the plaintiff's claims against his Solicitors. Those claims, even if they were made out, do not bear in any way upon the application for assessment of the Solicitors' costs. Accordingly, the letter is not an "objection" within the terms of that clause because it contains no objection to the fairness or reasonableness of part or all of the costs to be assessed.
The plaintiff sought to construe the following passages from the Manager's letter of 18 October 2011 as an admission that there had been non-compliance with clause 125:
3. Whilst it is possible that there is some irregularity in the application by not stating there was any objection to the application, that irregularity is relatively minor and cured as the objection was provided to Mr Webley on 4 October 2011. I do not consider the application to be invalidly made.
. . . Any dissatisfaction with this outcome may ground a review application.
I do not consider that these matters, fairly read, would amount to admissions. In any event, the question whether the letter of 20 July 2011 is an objection within the meaning of cl 125 is to be determined by this Court and not by the Manager's view, even if one had been expressed.
In my view, the application form was filled in correctly when it stated that no objection had been received. The letter of 20 July 2011 was not an "objection" that should have been annexed to the application when it was lodged. It is therefore not necessary to consider the effect of s 80 of the Interpretation Act since the form was completed in the specified manner.
If the Application does not comply, does the non-compliance make the Determination invalid?
This question does not need to be answered. However, in deference to the parties' submissions, I should indicate that I do not consider that Parliament intended that failure to comply with the stipulated requirement would invalidate the costs application or the consequential assessment. The matter is to be determined by reference to the principles enunciated in Project Blue Sky Inc v Australian Broadcasting Authority (Project Blue Sky) [1998] HCA 28; (1998) 194 CLR 355 at [91] - [100] per McHugh, Gummow, Kirby and Hayne JJ, and Tasker v Fullwood [1978] 1 NSWLR 20 at 23E-25B per Hope, Glass and Samuels JJA.
First, the requirement to attach an objection to the application is a purely procedural one, the evident purpose of which is to do no more than ensure, for reasons of efficiency, that the area of dispute between the parties to the assessment is as well delineated before the application for assessment is lodged as it can be. Nothing precludes an objection being made at a later time. Indeed, cl 125(1)(f) expressly contemplates that an objection might come in after the application has been lodged.
Secondly, any adverse consequences of an objection not being attached to an application for assessment are easily overcome. In any event s 359 of the Act requires the costs assessor to give the parties a reasonable opportunity to make written submissions. Any objection that had been omitted from an application for assessment could conveniently be submitted as part of that process. The receipt of any objection does not qualify the obligation of the Manager to refer the application to a costs assessor for assessment. Therefore the timing of receipt of an objection is irrelevant, as long as it is received before the deadline set by the costs assessor for submissions.
Furthermore significant inconvenience would be likely to arise if a failure to attach an objection in compliance with cl 125 invalidated the costs assessor's final determination. Much time and cost would be taken if that were to occur. The waste would be entirely disproportionate to the likely consequences of the failure to attach the objection to the application, given that an objection could be made in written submissions in any event. This is a powerful factor that weighs against invalidity: Project Blue Sky, at [97] per McHugh, Gummow, Kirby and Hayne JJ.
Mr Darke, who appeared for the Solicitors, fairly drew my attention to Brierley v Reeves [2001] NSWCA 189; (2001) 51 NSWLR 689 in which the Court of Appeal held at [40] that if an application for a costs assessment was not made in accordance with the then s 203 of the Legal Profession Act 1987, within the prescribed time, the proper officer of the Supreme Court, the Manager's statutory predecessor, had no jurisdiction in relation to the application. I accept Mr Darke's submission that Brierly is distinguishable since it concerned differently worded legislation and since the relevant failure was the failure to make an application for waiver within a specified time limit as distinct from a failure to attach a document.
Did the Assessment comply with the Act and the Regulations
The plaintiff submitted that the Costs Assessor failed to have regard to non-compliance by the Solicitors with the requirements of cl 125 of the Regulations and that this matter was relevant to the assessment of costs.
I understood the plaintiff's submission to be as follows:
(1) the Solicitors were professionally obliged to comply with the law and to comply with professional obligations of frankness;
(2) by certifying on the Application that no objection had been received, they failed to comply with the law and their professional obligations since the letter of 20 July 2011 amounted to an objection;
(3) whether lawyers have complied with the relevant legislation or legal profession rules is a matter to be taken into account under s 363(2) of the Act;
(4) the Costs Assessor did not take into account the Solicitors' conduct referred to above;
(5) accordingly, the Assessment should be set aside.
I reject this submission. The plaintiff has not identified any professional or legal obligation of which the Solicitors were in breach, save that alleged to arise from cl 125 in respect of which I have found no non-compliance. Section 363 does not apply in the instant case because it applies to costs assessments between solicitors and their own clients, rather than costs payable pursuant to a court order. In any event the conduct of a legal practitioner is not a mandatory relevant consideration, since it is referred to in s 363(2), rather than s 363(1). Accordingly a failure to take it into account is not an error of law: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 (Peko-Wallsend) at 39 - 41 per Mason J.
Whether there was a denial of natural justice
The plaintiff submitted that, although the Costs Assessor had stipulated a deadline for submissions of 20 October 2011, he was required to give the parties a final chance to make submissions before making the Assessment and to fail to do so was a denial of natural justice. I reject this submission. Natural justice requires that parties be given an opportunity to be heard, not that they be given several opportunities to be heard. I do not consider the plaintiff to have been denied natural justice.
The availability of relief from this Court
Even had I otherwise considered the Application and Assessment to be invalid, I would not have been disposed make a declaration to that effect or to stay the operation of the Certificate. As set out above, the Act provides a distinct mechanism for appeals to the District Court from a decision or determination of a costs assessor of which the plaintiff has not availed himself. The plaintiff could have appealed to the District Court pursuant to s 384 either against the Costs Assessor's decision that the non-attachment of the letter of 20 July 2011 was not a basis on which to delay the assessment or against the Determination itself. In those circumstances, this Court should not lightly reward the circumvention of such provisions: see, in this context, Gorczynski v Leichhardt Council [2007] NSWSC 202 at [16] - [25] per Hidden J and Currabubula v State Bank of NSW [2000] NSWSC 232 at [54] - [69] per Einstein J.
The judicial review case: the Refusal
The factors to be taken into account by the Manager in deciding whether to grant an extension of time for the review application are to be determined from the subject-matter, scope and purpose of legislation: Peko-Wallsend at 39 - 40 per Mason J.
Although the plaintiff originally submitted that the merits of the application were not relevant, he ultimately agreed, correctly in my view, that they were. Accordingly, the plaintiff accepted that the merits of the application, the delay, the explanation for the delay and prejudice were relevant considerations that were taken into account. The plaintiff has been unable to identify any irrelevant consideration that was taken into account.
Mandatory relevant consideration: interests of justice
The plaintiff submitted that the interests of justice were a mandatory relevant consideration and that the Manager failed to take them into account. It is apparent from the Reasons that the Manager had regard to what is "just and fair in the circumstances". Even if one were to accept that the interests of justice were a mandatory relevant consideration, I consider that they were taken into account. Although the Manager did not use the expression "interests of justice" I consider his reference to what is just and fair to encompass the same matters.
Mandatory relevant consideration: the conduct of the Solicitors' solicitors
The plaintiff submitted that the conduct of the Solicitors was relevant under s 363 and that accordingly it ought to have been considered by the Manager in deciding whether to extend time for the Review Application. For reasons already given I do not consider that there was any breach by the Solicitors or that s 363 applies to assessments of costs pursuant to court orders. In any event I do not consider that, even if it were a consideration relevant to the decision whether to extend time for the Review Application, it could conceivably be regarded as a mandatory relevant consideration. I reject the submission.
Whether the decision was manifestly unreasonable
The plaintiff submitted, in substance, that the delay sought to be excused was so small and the time required for an extension so short that to fail to grant an extension was manifestly unreasonable and therefore this Court should set aside the Refusal.
It is apparent from the Reasons that the Manager had regard to the delay, the explanation for the delay, the merits of the out-of-time Review Application, whether there was any prejudice and what is "just and fair in the circumstances". The Manager noted that the delay was approximately one week. He considered that the explanation for delay was insufficient but "not so much as to weigh against extending time". He did not consider there to be any direct prejudice to the parties. The Manager considered the decisive factor to be the merits of the application.
The Manager dealt with the complaints made by the plaintiff about the Assessment in the following terms:
"The jurisdiction of a party/party assessment is the cost order made by the Court or Tribunal that is set out in the application under s 353 of the Legal Profession Act 2004. It may be that there are competing costs orders or other orders related to the costs order, but an assessor is bound to determine the costs orders put forward by the applicant. A costs assessor does not have jurisdiction to go behind the costs order to sort out any other competing issues between the parties, the task is straightforward, to assess the fair and reasonable costs the subject of the order or orders in the application before him or her.
The general objection that the costs assessment cannot proceed because there are competing orders or other orders relating to the same proceedings between the parties that might form some sort of offset of debts between the parties is not a relevant consideration for a costs assessor. It may be if competing applications are filed at the same time, which commonly occurs, an assessor will conduct an assessment of each and may produce complementary determinations and certificates. Otherwise, it is not for an assessor to determine what balance of monies is to be owed between parties in relation to orders not the subject of the assessment, nor decline to continue to assess the application if other orders are outstanding. All of such matters are a question of enforcement, which is beyond the scope or jurisdiction of a costs assessor."
The Manager concluded in the Reasons:
"The merits are questionable as they simply put in issue the validity of the assessment process and the basis of questioning the process is simply incorrect."
I consider the Manager's view to be plainly correct. The matters on which the plaintiff relied or sought to rely, that is, his asserted claims against the Solicitors, were not rationally capable of bearing on the costs assessment. The so-called "objection" was not relevantly an objection for the purposes of cl 125 of the Regulations and could not, whenever it was received, have been taken into account by the Costs Assessor.
Furthermore, if an extension had been granted, the panel would have proceeded on the basis of the material that was before the Costs Assessor. Since the Costs Assessor did not have before him any evidence as to why the costs claimed by the Solicitors were not fair and reasonable, it is difficult to see how the review panel could rationally have come to a different view.
Orders
For the foregoing reasons, I make the following orders:
(1) Dismiss the plaintiff's claims for relief in prayers 1-5 of the summons.
(2) Order the plaintiff to pay the costs of the proceedings in so far as they relate to the claims for relief in prayers 1-5 of the summons.
(3) Stand over the plaintiff's claim for relief under prayer 6 of the summons to a date before the Registrar.
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Decision last updated: 26 February 2013
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