Krivoshev v Royal Society for the Prevention of Cruelty to Animals

[2007] NSWSC 1479

CITATION:	Krivoshev v Royal Society for the Prevention of Cruelty to Animals [2007] NSWSC 1479
HEARING DATE(S):	14/12/07
JUDGMENT DATE :	18 December 2007
JUDGMENT OF:	Bell J at 1
DECISION:	1. Refuse leave to appeal pursuant to s 385 of the Legal Profession Act 2004; 2. Dismiss the amended summons; 3. The plaintiffs are to pay the defendants’ costs
CATCHWORDS:	APPEAL - Review Panel - determination of costs
LEGISLATION CITED:	Legal Profession Act 2004
CASES CITED:	Chapmans Ltd v Yandell [1999] NSWCA 361 Dyktynski v BHP Titanium Minerals Pty Ltd (2004) 60 NSWLR 203 Muriniti v Lyons [2004] NSWSC 235 Ryan v Hansen [2000] NSWSC 354; 49 NSWLR 184
PARTIES:	Michael Krivoshev (1st Plaintiff) Kerry-Ann Donnelly (2nd Plaintiff) Royal Society for the Prevention of Cruelty to Animals (Defendant)
FILE NUMBER(S):	SC 11757/07
COUNSEL:	In person (1st Plaintiff) S Todd (Defendant)
SOLICITORS:	In person (Plaintiff) Ebsworth & Ebsworth (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

BELL J

18 December 2007

11757/07 Michael Krivoshev v Royal Society for the Prevention of Cruelty to Animals

JUDGMENT

1 BELL J: The plaintiffs, Michael Krivoshev and Kerry-Ann Donnelly, appeal against the decision of a review panel on a matter of law under s 384(1) of the Legal Profession Act 2004 (the Act) and seek leave to appeal against the determination made by the panel made under s 385 of the Act.

2 The proceedings were commenced by summons that was filed on 5 April 2007. An amended summons was filed on 2 May 2007.

3 The plaintiffs’ amended summons was struck out as the result of a self-executing order made by the Registrar, which took effect on 20 July 2007. Thereafter the plaintiffs moved for a review of the Registrar’s order. The motion for a review was listed for hearing on 5 December 2007 on the understanding that if the plaintiffs were successful in having the order set aside, the Court would proceed to determine the claims for relief in the amended summons.

4 On 5 December there was no appearance on behalf of Ms Donnelly. Mr Krivoshev appeared in person.

5 I set aside the order made by the Registrar striking out the amended summons. Mr Krivoshev informed the Court that he was not in a position to proceed with the hearing of the appeal and that he intended to adduce evidence in addition to that contained in his affidavit of 1 June 2007, which had been filed. The defendants filed an affidavit sworn by Maureen Norberry, which was sworn on 30 November 2007.

6 The further hearing of the appeal was stood over to 14 December 2007 with directions that Mr Krivoshev serve any further evidence upon which he proposed to rely by 5.00pm on 7 December 2007.

7 On 14 December 2007 each of the plaintiffs appeared in person. Ms Donnelly did not take any active part in the conduct of the proceedings.

8 The plaintiffs read the affidavit of Michael Krivoshev (paragraphs (24) – (27) and (29) – (35) and (38) were rejected). This was the only evidence led in the plaintiffs’ case.

9 The defendants read the affidavit of Maureen Norberry.

10 The background to the present proceedings is set out in Mr Krivoshev’s affidavit.

11 The plaintiffs commenced proceedings against the defendants in the District Court in 2001. The proceedings were heard before O’Conner DCJ in September 2002. His Honour gave judgment for the defendants with costs. The plaintiff appealed against the judgment to the Court of Appeal. In April 2005 the Court of Appeal dismissed the plaintiffs’ appeal with costs.

12 On 13 April 2006 Ebsworth & Ebsworth, the solicitors acting for the defendants, made application under the Legal Profession Act 2004 (the Act) for the assessment of their costs. The amount of the costs in issue was the whole of their itemised bill of costs in the sum of $268,925.04 (the bill of costs).

13 On 2 May 2006, Richard Gulley, the costs assessor appointed in accordance with the Act, wrote to the plaintiffs inviting them to submit to him any objections to items in the bill of costs and any submissions within 14 days.

14 Mr Krivoshev wrote to Mr Gulley on 9 May 2006 informing him that he had difficulty in complying with timetables because of obligations imposed on him under orders made by the Family Court. He said that he would do his best to comply with Mr Gulley’s request. His letter continued:

Our primary objection is that we should not have to pay any costs at all. There are two reasons for this.
Firstly, it appears that the RSPCA legal team have already been indemnified as to their legal costs and disbursements by an insurance company, the basis on which payment was made escapes me as I do not have any information about the policy terms. This can be evidenced in a letter from Ebsworths sent to me dated 27 October 2005. In this letter Ebsworths stated that they were instructed by an insurer for the recovery of the RSPCA’s costs. This implied to me that the insurance company and not the RSPCA was seeking to recoup their losses and that Ebsworths have already been paid the full amount, being the amount that was filed in the Supreme Court. In response to a letter I sent to Ebsworth dated 1 April 2006, Freida Stylianou of Ebsworth & Ebsworth told me by phone that the insurance company indemnity payment was “a matter of subrogation”. Ms Stylianou also confirmed that it was her client the insurance company that was seeking this assessment.
Secondly, since the insurance company apparently indemnified and paid the RSPCA costs allegedly pursuant to a policy indemnifying such risks, then it does not stand to reason that the insurer can recoup their losses by forcing a third party to pay them their losses. The very nature of insuring against risk precludes insurers from later recouping their losses from a third party after paying on a claim.
…
I would be also objecting to the value of the costs, the figure seeming overly high to me. It may be the case, and certainly appears to me, that the hourly rates claimed by Ebsworths is the current prescribed rate. I find it difficult to accept that the current prescribed hourly rate would have been the same several years ago. It may be an erroneous issue on my part, but this issue may warrant closer examination.
…
I am unable to object to or raise any issues regarding whether the work done was reasonable, necessary, the quality of the work done or any other similar matter which you will take into account as outlined in your letter, because I’m not in a position to assess this and make submissions about this. In this case I would be relying on your expertise as an assessor to resolve these matters in a just an equitable manner (sic).

15 On 4 June 2006 Mr Krivoshev wrote to Mr Gulley raising some further objections. He disputed that Ebsworths had provided Mr Gulley with a copy of all invoices and accounts, which had been included in the bill of costs by way of disbursements. He drew attention to an asserted discrepancy in counsel’s memorandum of fees in relation to an entry dated 19/2/2005. More generally Mr Krivoshev queried counsel’s fees, contending that the total amount claimed appeared to be overstated by an amount close to 100 per cent. He renewed his objection that the defendants were not entitled to recover their costs because the proceedings had been funded by their insurer.

16 Section 367A of the Act provides that a costs assessor is to determine an application for an assessment of costs payable as the result of an order made by a court by making a determination of the fair and reasonable amount of those costs. On making a determination a costs assessor is required under s 368 to issue to each party and the Manager Costs Assessment a certificate that sets out the determination. In the case of an amount of costs that has not been paid, the certificate is, on filing in the registry of a court (having jurisdiction to order the payment of that amount of money) taken to be a judgment of that court for the amount of the unpaid costs.

17 On 2 November 2006 Mr Gulley issued his certificate of determination of party and party costs under s 367A. Mr Gulley determined as a fair and reasonable amount of costs to be paid to the defendants the sum of $247,371.40. This was exclusive of the costs of the costs assessment, for which a separate certificate issued. Mr Gulley gave reasons for his determination, which are dated 2 November 2006 (annexure “D” to Mr Krivoshev’s affidavit).

18 A party who is dissatisfied with a determination of a costs assessor may pursuant to s 373, within 30 days after the issue of the certificate, apply to the Manager, Costs Assessment for a review of the determination.

19 On 23 November 2006 Mr Krivoshev wrote to Ebsworths advising of his, and Ms Donnelly’s, intention to file an application for a review of costs assessment.

20 The application for review of the determination was filed on 1 December 2006. The Manager, Costs Assessment in the case of an application prepared under s 373A may refer the application to a panel. The plaintiffs’ application was referred to a panel.

21 A panel is constituted by two costs assessors (s 374(2)).

22 The plaintiffs’ grounds for the application for review were stated as follows:

1. Costs assessor failed to give adequate or any reasons for decisions made.
2. Costs assessor failed to address and give reasons for each objection made by the Costs Assessment Defendants.
3. No correspondence whatsoever from the costs assessor to the Costs Assessment Defendants regarding any objections made.
4. The costs assessor failed, on being notified in writing of the dispute as to the Costs Assessment Respondent’s liability to pay the costs, to decline to make a determination or issue a certificate unless and until such issue was resolved.

23 The functions of a panel in relation to a review application are set out in s 375 of the Act:

375 General functions of panel in relation to review application

(1) A panel constituted under this Subdivision may review the determination of the costs assessor and may:
(a) affirm the costs assessor’s determination, or
(b) set aside the costs assessor’s determination and substitute such determination in relation to the costs assessment as, in their opinion, should have been made by the costs assessor who made the determination that is the subject of the review.
(2) For the purposes of subsection (1), the panel has, in relation to the application for assessment, all the functions of a costs assessor under this Part and is to determine the application, subject to this Subdivision and the regulations, in the manner that a costs assessor would be required to determine an application for costs assessment.
(3) However, the assessment is to be conducted on the evidence that was received by the costs assessor who made the determination that is the subject of the assessment and, unless the panel determines otherwise, the panel is not:
(a) to receive submissions from the parties to the assessment, or
(b) to receive any fresh evidence or evidence in addition to or in substitution for the evidence received by the costs assessor.
(3A) A panel reviewing the determination of a costs assessor may determine that the amount of fair and reasonable costs is the amount agreed to by the parties to the review if during the course of the review the parties notify the panel that they have agreed on the amount of those costs.
(4) If the costs assessors who constitute the panel are unable to agree on a determination in relation to an application, the panel is to affirm the determination of the costs assessor who made the determination that is the subject of the review.

24 On 9 February 2007 Mr Bartos, one of the members of the panel, wrote to Ebsworths noting the provisions of s 375(3A) and requesting that Ebsworths provide copies of its costs agreement with its client, its solicitor/client tax invoices and the appeal books filed in the Court of Appeal. Mr Bartos sought further material, a copy of Ebsworth’s client ledger showing the amounts rendered by it as a progressive total, in an email dated 15 February 2007.

25 Ebsworths furnished the material requested by the Review Panel under cover of letters dated 12 and 19 February 2007.

26 The Review Panel issued its determination on 19 March 2007. It set aside the determination made by Mr Gulley and substituted the following determination:

We have determined the application by assessing as fair and reasonable legal costs in the sum of $91,313.50 and disbursements in the sum of $146,871.87 (that is, $148,371.87 - $1,500.00 in relation to items 1431, 1432 and 1434), that is, a total sum of $238,185.37.

27 Since the plaintiffs had not improved their position by 15 per cent or more the panel determined that they should pay the costs of the review.

28 The certificate of the determination of the review setting aside the determination of the costs assessor on filing in the registry of a court takes effect as a judgment of that court for the amount of the unpaid costs (s 378(3)).

29 In its reasons for determination the panel noted that it had determined (in accordance with s 375(3)) to (i) receive the appeal books and the solicitor/client taxation invoices being evidence in addition to the evidence received by the costs assessor, and that (ii) it would not receive submissions from the parties.

30 The panel stated that in conducting the review it had considered:

· The application for review and its attachments;

· The reasons issued on 2 November 2006 by the costs assessor;

· All of the material put before the costs assessor, including the bill of costs, objections and replies to objections;

· The seven appeal books supplied by Ebsworths;

· Ebsworth’s solicitor/client taxation invoices.

31 The panel noted that the plaintiffs had raised in their objections that the total costs and disbursements claimed on a party and party basis exceeded the amount of costs and disbursements charged by Ebsworths to the defendants. The panel noted that there was some support for the stated concern in the correspondence, which had been provided by Ebsworths to the costs assessor. The panel instanced an email communication of 13 October 2005, (referred to in paragraph 4.2 of the plaintiffs’ written submissions). In this it was asserted by the solicitor with the conduct of the matter that the defence costs, including counsel’s fees billed directly, exceeded $139,000. In a further communication of 27 October 2005 the panel noted Ebsworths had stated that the costs exceeded $150,000. The panel noted the amounts sought to be recovered under the bill of costs was $268,925.04.

32 The panel went on to state:

In the circumstances the issue raised by the Review Applicants was a legitimate one and ought to have been pursued by the Costs Assessor. It is not referred to in the Statement of Reasons and, as far as we could ascertain in any of the correspondence.
We have requested from the Review Defendants’ solicitors a copy of their solicitor/client tax invoices. The total amount of costs charged to the client exceeded $129,000 (not including GST). Disbursements exceeded $45,000. Some counsel’s fees were included, but not all, since Mr Todd’s total fees were $138,575.00 and were apparently billed directly.
Accordingly there was no breach of the indemnity principle, that is, that a party cannot recover more costs than another party than it is liable to pay to its own solicitor.
The confusion may have been created by the fact that the claims by the Review Applicants were initially separate claims treated and billed as such by the Review Respondent’s solicitors and hence the costs referred to in the correspondence may have only inadvertently referred to the costs of one of the claims.
The Review Applicants also raised, what they thought were apparent inconsistencies in the fees charged by Mr Todd. His fees increased from $3,025 per day to $3,300 per day during the course of the proceedings, which we would accept as fair and reasonable. At times he appeared to charge only $1,512.50 per day or $1,650.00 per day at other times $3,025 and later $3,300 per day. However this was due to the fact that the Review Applicants’ claims were initially treated as separate claims and billed by him to the Review Defendants’ solicitors as such. Thus when he spent a whole day on both claims he divided his charges between the two accounts.
Overall we found Mr Todd’s fees to be fair and reasonable, except for the attendance on 10 September 2002 where in addition to his brief on hearing fee he also charged $1,500 plus GST for amending pleadings and a conference. We disallowed these additional attendances (items 1431, 1432 and 1434).

33 The panel noted that the plaintiffs had objected to the quantum of the bill of costs noting that they were not in a position to assess whether the charges were fair and reasonable and that they had left this to the Costs Assessor’s expertise.

34 The panel continued:

We perused the solicitor/client tax invoices and selected a number of more substantial entries in the tax invoices and compared these against corresponding entries in the bill of costs. We noticed a number of anomalies, for example:
(i) There does not appear to be a corresponding entry in the tax invoices for item 279 ($460.00);
(ii) Item 344 ($506.00) – corresponding charge appears to be on 4/12/01 for $345.00;
(iii) Item 508 ($405.00) – corresponding charge appears to be $108.00;
(iv) Item 559 claim for 2.1 hour conference with counsel, counsel claimed 1 hour (item 1387);
(v) Item 644 ($480.00) – corresponding charge appears to be $256.00; and
(vi) Item 648 ($640.00) – corresponding charge appears to be $480.00.
We are not suggesting that there was some deliberate attempt to inflate costs. Rather, from our experience some costs consultants in preparing a bill of costs, in absence of a file note, etc, substitute their assessment as to how what would be reasonable time to carry out the task, or solicitors at times reduce the amount of time they spent on a task for the purpose of the solicitor/client account. However, in our determination, any inconsistencies between the solicitor/client tax invoices and a party/party bill of costs should be resolved in favour of the Review Applicants.
…
For the reasons stated above there were a number of instances where we were of the view that the use of minimum of six minute units had led to inflation of costs.
In all of the circumstances, we have determined to reduce the amount of costs by $5,000.00 to compensate for the above two matters. Apart from that we find the costs are fair and reasonable.

35 The Act makes provision for appeals to this Court from the decision of a costs assessor as to a matter of law under s 384(1) and against the decision of a costs assessor with the leave of the Court under s 385. By virtue of s 382(1) these provisions apply in relation to a decision or determination of a panel as if the references in ss 384 and 385 to costs assessors were to the panel. Subject to subsection (1), the panel’s determination of an application for review of a costs assessor’s determination is binding on all parties to the assessment and no appeal or other review lies in respect of it (s 328(2)).

36 The orders claimed in the amended summons are:

1. Certificate of determination of costs issued on 19/3/2007 by Costs Assessment Review Panel be set aside.
2. Leave of the Court to appeal on facts or merits.
3. Appeal on matters of law.
4. Hearing de novo on costs and disbursements issue.
5. The certificate of determination issued on 19/3/2007 be stayed permanently.

37 Seven grounds of appeal are set out in the plaintiffs’ amended summons:

1. Large discrepancies in submitted material by Respondent’s to the Review Panel relating to costs and disbursements, namely: totals for Respondent’s Bill of Costs filed in Supreme Court, the supplied invoices and the Bill Summary Report all show large differences in total amounts.
2. Review Panel failed to fully address large discrepancies in material submitted to them by Respondent’s, namely: the Review Panel’s reasons for Review Determination at 3.2 page 3 acknowledges the discrepancies, but fails to address these discrepancies in regards to supporting evidence that was before them.
3. The Review Panel failed in its obligation to assess the costs on the evidence before them, namely; the Review Panel did not have supporting evidence to justify affirming the Respondent’s Bill of Costs filed in the Supreme Court.
4. The determination amount was unreasonable and erroneous in the circumstances, namely: the difference between totals in the Respondent’s filed Bill of Costs and totals in invoices supplied by the Defendants to the Review Panel in large and discrepancies were determined by the Review Panel to be resolved in favour of the Review Applicants. This did not occur and so renders the Review Determination unreasonable and erroneous.
5. The Review Panel failed to decline to deal with the Costs Review while liability was in dispute.
6. The Plaintiffs were denied procedural fairness, namely discrepancies between invoices and Bill of Costs that should have been identified were not identified and were not resolved in the Appellant’s favour as the Review Panel stated they would; also having selected a number of more substantial entries in the Tax Invoices and comparing these against corresponding entries in the Bill of Costs and identifying anomalies, in those circumstances the Review Panel was obliged to thoroughly examine the balance of the material submitted by the Costs Assessment applicants, which was not done.
7. The Defendants engaged in Abuse of Process, namely the Defendants intentionally submitted evidence which was clearly contradictory (ie Bill of Costs, invoices and Bill Summary Report) which was relied on by the Costs Assessor and the Costs Review Panel in the course of their determination. The Defendants should have been aware of these contradictions and anomalies but chose to maintain these proceedings without taking any steps in rectifying the contradictions.

38 Written submissions on the plaintiffs’ behalf were filed on 10 July 2007.

39 The hearing proceeded on the basis of the determination of the application for leave together with the other claims for relief, which appear to be an appeal under s 384(1) and a claim that the panel’s determination be set aside on the ground of denial of procedural fairness and/or abuse of process.

40 I will refer to the evidence read in the defendants’ case. Maureen Norberry is a solicitor and costs consultant who was instructed by Ebsworths to draft the bill of costs.

41 Ms Norberry explains the differences between a bill of costs prepared on a party and party basis and one drawn on a solicitor and client basis. She sets out the matters that she considered in drawing the bill of costs. These included the Ebsworth file. Ms Norberry says that when drafting an itemised bill of costs on a party and party basis she estimates the time taken for an attendance in cases in which the information is not provided in the file. She considers the tax invoices sent by the law practice to the client, if they are available, when preparing a bill of costs on a party and party basis to ensure that the indemnity principle is not breached. Ms Norberry believes there has been no breach of the indemnity principle in the bill of costs.

42 Attendances in a bill of costs drawn on a party and party basis in Ms Norberry’s experience are always more detailed than in a law practice’s tax invoices. Composite attendances appearing in the tax invoice issued to a client will be itemised and broken up into individual attendances in the party and party bill of costs. She explains that his is the reason why attendances listed in the bill of costs were not separately itemised in the tax invoices issued to the clients by Ebsworths.

43 Ms Norberry set out in paragraph 11(a) – (p), by way of example, a number of the items which she understood the plaintiffs to dispute, explaining how the challenged item was arrived at in the bill of costs, distinguishing the treatment of items in the tax invoices issued by Ebsworths from the claim in the bill of costs.

44 Copies of counsel’s memoranda of fees, totalling $138,575, which were paid to counsel in the RSPCA proceedings are annexed to Ms Norberry’s affidavit.

45 Ms Norberry states her belief that the bill of costs was fair and reasonable on a party and party basis, pursuant to the costs orders made, and is an accurate representation of the work performed by Ebsworths in acting on behalf of the defendants.

46 Ms Norberry was not required for cross-examination.

47 At the conclusion of the hearing on 5 December 2007 Mr Todd, counsel for the defendants, submitted that it was the defendants’ position that all of the fee notes submitted by counsel in the proceedings were annexed to Ms Norberry’s affidavit at pp 12 – 44. Those at pp 12 –31 were submitted directly to the insurer and amounted to $101,365. Mr Todd invited Mr Krivoshev to inspect them in the interim before the resumption of the hearing. (T 5/12/07 34.27 54)

48 The plaintiffs require leave to appeal against the determination of the panel. In the event that leave is granted the Court may hear and determine the appeal. An appeal is by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given (s 385(4). After deciding the questions the subject of the appeal, the Court may, unless it affirms the costs assessor’s decision, make such determination in relation to the application as, in its opinion, should have been made by the costs assessor (s 385 (5)).

49 In Chapmans Ltd v Yandell [1999] NSWCA 361 the Court of Appeal considered the principles to be applied in dealing with an application for leave to appeal against the determination of a costs assessor under the provisions of the Legal Profession Act 1987 (the former Act). The scheme with respect to appeals to this Court under the former Act was similar to the scheme under the Act. Justice Fitzgerald (with whose judgment Mason P and Davies AJA agreed) said this:

[9] The master did not consider Mr Ganke’s affidavit in deciding whether to grant the appellant leave to appeal under s208M of the Act. In my opinion he should have done so. It was appropriate for him to take into account that, if leave to appeal was granted, the appeal would be a complete re-hearing de novo, that is a complete re-hearing at which it would be open to the appellant to adduce further evidence including that contained in Mr Ganke’s affidavit.

[10] Given the nature of the appeal under s208M of the Act, I am satisfied that a master to whom an application for leave to appeal is made under that section should consider any material evidence which bears upon whether or not leave to appeal should be granted, including evidence which bears upon the likely outcome of the appeal if leave is granted: see Public Service Association of South Australia v Federation Clerks’ Union of Australia, South Australian Branch. (1991) 173 CLR 132.

[11] On the other hand, it is important to keep in mind the purpose of a requirement of leave to appeal. It is intended to act as a filter to ensure that unsuitable appellant proceedings which are not able to be brought with the demands which that places upon the resources of the Court and the burden which it places upon other parties and the delays which it causes to other litigants. See for example Coulter v Regina. (1988) 166 CLR 350 about 359.

[12] It is also in my opinion important to keep in mind that s208M must be considered in the context of s208L, which restricts an appeal as of right to matters of law. In considering whether or not leave to appeal is granted, it must be decided whether or not, there not being a matter of law arising in the proceeding and there being an appeal as of right only as to a matter of law, there is some other matter which in justice requires that leave to appeal be granted to allow that matter to be relitigated. The party seeking leave to appeal obviously bears the burden of establishing that justice does require that leave to appeal be granted. Further, the master when considering whether to grant leave to appeal obviously has a very wide discretion: see CDJ v VAJ.[1998] HCA 67 per McHugh, Gummow and Callinan, JJ.

50 In their written submissions the plaintiffs assert that leave should be granted because “[l]iability was from the outset disputed by the plaintiffs” (WS 4.27); Muriniti v Lyons [2004] NSWSC 235. In that case Dunford J was dealing with a leave application in a circumstance in which there was an issue as to the plaintiff’s liability to pay the costs. His Honour referred to the decision in Ryan v Hansen [2000] NSWSC 354; 49 NSWLR 184 in which it was held that a costs assessor has no power to take sworn evidence or to resolve conflicts of evidence. His Honour concluded that on being notified of the dispute as to the liability to pay the costs the costs assessor should have declined to make a determination or to issue a certificate until the dispute was resolved (at [57]).

51 No question of the character with which Dunford J was concerned arises here where the defendants’ entitlement to the costs is by reason of the order made by the Court. The plaintiffs’ written submissions in support of ground 5 are misconceived.

52 The plaintiffs’ written submissions directed to Ground 1 raise a factual matter that was prominent in the oral submissions made by Mr Krivoshev on the hearing of the amended summons. The plaintiffs submit that the itemised bill of costs filed by the defendants amounts to a total of $268,925.04. The schedule of Ebsworths tax invoices, including a progressive total supplied to the Review Panel at the Panel’s request (annexure “G” to Mr Krivoshev’s affidavit) shows a progressive total at 21 December 2005 in the sum of $153,697.27. Generally, it is Mr Krivoshev’s contention that there is a discrepancy of many thousands of dollars between the sum claimed in the itemised bill of costs and the amount of costs incurred by Ebsworths. In his written submissions it is said that the various discrepancies (to which reference is made in paragraphs 4.1 – 4.11) are such that “the only equitable remedy should be that the plaintiffs be granted leave to appeal this injustice”.

53 The factual issue addressed in the plaintiffs’ written submissions and urged on the hearing appears in large measure to arise from the circumstance that a substantial portion of counsel’s fees was billed directly to the insurer. This is dealt with in the panel’s reasons for determination. On the hearing Mr Krivoshev submitted that the panel had found that some of counsel’s fees had been billed directly without material to support the finding. This was a reference to the statement in the panel’s reasons that, “[s]ome counsel’s fees were included, but not all, since Mr Todd’s total fees were $138,575.00 and were apparently dealt with directly”. (p 3.4) (emphasis added) There is no reason to conclude that the panel did not have material to support its finding that some of counsel’s fees were billed directly. The panel appear to have reviewed counsel’s fees with care. The panel concluded that overall counsel’s fees were fair and reasonable. The panel disallowed one attendance on 10 September 2002. (p 3.9)

54 Mr Krivoshev submitted that the panel had selected tax invoices at random and these had revealed anomalies which by and large favoured the defendants. (p 4.3) In his submission leave should be granted so that at a new hearing all of the tax invoices could be compared with the bill and costs, a process which in his submission was likely to reveal many more anomalies in the plaintiffs’ favour.

55 The panel’s reasons do not state that the anomalies were identified in the random manner that the plaintiffs suggest. The panel appears to have carried out a thorough review. The panel considered the plaintiffs’ objection that the costs claimed on a party and party basis appeared to have exceeded the amount charged by Ebsworths to the defendants. This led the panel to require Ebsworths to produce the tax invoices and the other material to which I have referred. The panel states that it perused the solicitor/client tax invoices and selected a number of the more substantial entries comparing these against corresponding entries in the bills of costs. (4.2)

56 This is a determination under s 376A of the assessment of costs that are payable as the result of an order made by the court. The assessment requires the determination of the fair and reasonable amount of those costs. The Act provides for this determination to be made by a costs assessor and, in the case of a determination under s 376A, permits a review. Subject to the provisions of ss 384 and 385 the panel’s determination is final. Mr Krivoshev maintains a conviction that the bill of costs is inflated by a figure of the order of $90,000. This appears to flow from the confusion occasioned by the fact that some of counsel’s fees were billed to the insurer directly. It has been dealt with by the panel in its reasons. No challenge is made to Ms Norberry’s evidence and there is nothing in the evidence or in the plaintiffs’ submissions which identifies any basis for the grant of leave under s 385 to allow a new hearing.

57 The plaintiffs by their amended summons also appeal against the determination of the panel on a matter of law under s 384.

58 The panel determined that the costs assessor was right to reject the plaintiffs’ submission that because the defendants were insured and the litigation was in effect conducted and funded by the insurer they were not entitled to recover their costs for the plaintiffs: Dyktynski v BHP Titanium Minerals Pty Ltd (2004) 60 NSWLR 203. On the hearing of the appeal Mr Krivoshev did not maintain that the panel erred in its determination in this respect.

59 The plaintiffs do not identify any decision of the panel as to a matter of law which is said to be erroneous.

60 The plaintiffs claim an order setting aside the panel’s determination. In the grounds of appeal attached to the amended summons the plaintiffs contend that they have been denied procedural fairness. This contention arises out of the panel’s review of the tax invoices. Mr Krivoshev submitted that the procedure followed by the panel was flawed because, having selected items from the tax invoices at random and detected anomalies, the panel did not embark on a systematic review. I have dealt with this above.

61 The plaintiffs were invited to submit objections to the bill of costs and submissions to the costs assessor. These were before the panel. The panel is to conduct the review on the evidence that was before the costs assessor who made the determination and unless the panel otherwise determines it is not to receive submissions from the parties or fresh evidence or evidence in addition to that received by the costs assessor (s 375(3). No point was taken that having determined to obtain evidence in addition to the evidence that was before the costs assessor the panel should have offered the parties an opportunity to make submissions on the additional evidence.

62 The plaintiffs have not established that the determination should be set aside by reason that the panel failed to accord them procedural fairness.

63 The seventh ground of alleges abuse of process. This appears to be advanced as an alternative basis for claiming an order setting aside the panel’s determination. In oral submissions Mr Krivoshev put it this way:

The abuse of process I suppose would be that – it could be argued that the defendants, that being their own bill of costs, their own invoices, obviously that they were in control and charge of and should have known that there were going to be these kind of discrepancies and yet they maintained that there were reasonable explanations for it and proceeded with it. (T 14/12/07 55.50-56).

64 There is no substance to the challenge that the defendants “engaged in abuse of process”.

65 For these reasons I make the following orders.

ORDERS

1. Refuse leave to appeal pursuant to s 385 of the Legal Profession Act 2004;

2. Dismiss the amended summons;

3. The plaintiffs are to pay the defendants’ costs.

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