Muriniti v Lyons

[2004] NSWSC 135

CITATION:	Muriniti v Lyons [2004] NSWSC 135
HEARING DATE(S):	6 November 2003
JUDGMENT DATE:	10 March 2004
JUDGMENT OF:	Dunford J
DECISION:	Appeal allowed - extensions of time granted - determination of Costs Assessor set aside - directions for further conduct of proceedings.
CATCHWORDS:	PROCEDURE - costs - assessment of - liability for costs in dispute - powers of Costs Assessor - extension of time to appeal etc - relevance of delay - WORDS and PHRASES - "assessor".
LEGISLATION CITED:	Legal Profession Act 1987 ss 201, 203, 204, 205, 207, 208, Legal Profession Reform Act 1993 Legal Profession Regulation 1994 cl 26A Patents Act 1952 (Cth) s 20 SCR Pt 51A r 3
CASES CITED:	Adams v Kennick Trading (International) Ltd (1986) 4 NSWLR 503 Baker v Kearney [2002] NSWSC 746 Chapmans Limited v Yandells [1999] NSWCCA 361 Cohen v McWilliam (1995) 38 NSWLR 476 Evans v Bartlam [1937] AC 473 Floyd v Lyons [1897] 1 Ch 633 Lace v Younan [1999] NSWSC 1072 Muriniti v Lyons & Ors [2000] NSWSC 680 Ryan v Hansen [2000] NSWSC 354, 49 NSWLR 184 Rowe v Australian United Steam Navigation Co Ltd (1909) 9 CLR 1
PARTIES :	Leonardo Carlo Muriniti v Janice Lyons
FILE NUMBER(S):	SC 20210/01; 10315/03
COUNSEL:	J R Dupree - Plaintiff E A Cohen - Defendant
SOLICITORS:	L C Muriniti & Associates - Plaintiff

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IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

DUNFORD J

WEDNESDAY 10 MARCH 2004

20210/01} LEONARDO CARLO MURINITI v JANICE LYONS
10315/03}

JUDGMENT

1 HIS HONOUR: Proceedings no 20210/01, which were commenced by Statement of Claim on 27 March 2001, have already been before the Court on at least 19 occasions (for directions, motions or hearings) and are presently before me by way of an appeal from the dismissal by Master Harrison of an application by the plaintiff for an extension of time to apply for leave to appeal against a determination of the assessment of costs by a Costs Assessor (Mr P J McNally) (no 91106/99). The issues between the parties, which are not complicated although disputed, have also been, and are, the subject of other proceedings in this Court (nos 12152/99 and 10315/03) and a couple of forays into the Local Court.

2 The dispute between the parties relates to barrister’s fees. The plaintiff is a solicitor who was in the habit of briefing the late Robert Lyons (the deceased), a barrister-at-law who died on 2 May 1995 and whose widow, and executrix is the defendant. References to LCM 1 are references to page numbers in Exhibit A (Exhibit LCM 1 to the affidavit of the plaintiff sworn 1 August 2002).

3 One of the matters in which the plaintiff briefed the deceased was a case in which they acted for Seija Mather, Jack Koopman, and ARX Pty Limited in this Court (the Mather retainer). It would seem that the fee was agreed between the plaintiff and the deceased at $24,550 and it is agreed that this was a contingent fee. The plaintiff claims that the contingency was two-fold, namely that Ms Mather and the others should be successful in the proceedings and that a lock patent (the subject of the proceedings) should subsequently be sold by them. He concedes that the first contingency has been fulfilled, but denies that the second one has. On the other hand, the defendant denies that payment of the fees was contingent on the patent being sold, and claims in the alternative that if it was, that contingency has been satisfied by the transfer of the patent from ARX Pty Limited to Ms Mather. The fees agreement between the plaintiff and the deceased was not in writing. It was made in about May 1994 and all the work was concluded by the end of that year.

4 The defendant could have sued for the fees in the Local Court. If she had done so, the plaintiff would presumably have filed a Defence alleging that the liability to pay was subject to conditions precedent, which had not been fulfilled, and the issues in dispute could have been determined expeditiously by a court with jurisdiction in the matter. However, she did not follow that course.

5 Initially, in about 1996, the defendant complained to the New South Wales Bar Association concerning fees allegedly payable by the plaintiff to the deceased in relation to other matters (LCM 1 at 10-11), and these were resolved by payment of a cheque to the defendant in December 1996. (LCM 1 at 03).

6 She then, on 28 May 1997, complained to the Law Society of New South Wales about this and other matters (LCM 1 at 66); but after much correspondence, this complaint was dismissed – see letter from Professional Standards Department of 10 March 1999 (LCM 1 at 12-14).

7 Following this, on 7 June 1999 the defendant applied to this Court for a Costs Assessment pursuant to s 201 of the Legal Profession Act 1987 (the Act). The application was given the number 91106/99.

8 In relation to this matter, the defendant claimed for the Mather retainer $25,200 made up of what she described as “Account rendered” ($24,550), and an additional $650 said to be for a Memorandum of Advice dated 5 December 1994. She also claimed in respect of two other matters: Criminal Proceedings against Koopman and Mather ($2,100) and Custom Credit Corporation Ltd v Doboy Flooring Pty Ltd ($3,210) (LCM 1 at 157 to 163). It appears at least arguable that the fee for the Mather retainer had been agreed at $24,550 (see LCM 1 at 68), and the additional memorandum of fees for $650 (which was subsequently disallowed by the Costs Assessor) was only included to provide the semblance of a dispute as to quantum.

9 Notice of the application was given to the plaintiff in accordance with cl 26A of the Legal Profession Regulation 1994 on 9 June 1999 (LCM 1 at 156), and the plaintiff replied with a number of objections by letter dated 15 June 1999 (LCM 1 at 153-155). Apart from technical and procedural objections, the plaintiff also objected that “as a matter of law the estate of Robert Lyons, or more properly Mrs Lyons, is not entitled to have any costs assessed as there are no fees due and payable to the estate or to Mrs Lyons”. He enclosed copies of the determination by the Professional Standards Department of the Law Society and claimed there were conditions precedent pursuant to which the deceased had accepted the brief, which had not been met. He submitted that the application for a costs assessment was an abuse of process, and in particular:

“…that the current situation does not permit the involvement of a costs assessor as there are no costs yet due and payable to the estate until such time as the condition of precedent (sic) to which the late Robert Lyons accepted our brief are met……”

10 The defendant responded to the plaintiff’s objections by letter dated 5 July 1999 (LCM 1 at 150-152). In relation to the matter presently in dispute she said:

“The fee notes for legal work done for Koopman and Mather is the most amount my late husband ever submitted and involved an enormous amount of work. Before his death he told me that he was owed approximately $40,000 by these clients. There was never any mention of conditions or pro bono work. Nor was this brief in his contingency file….. Robert was very distressed when the client, ignoring advice from Mr Muriniti and himself, involved a third person in a contract for $2 million, which collapsed the deal days before signing…”
In a letter dated June 1996, Mr Muriniti clearly sets out his understanding of the conditions under which fees are due:

1. We would be paid if the clients succeeded and

2. The clients managed to sell their lock patent.

I submit that not only have these conditions been met but a search of a company Arvo ACN 076 974 304 shows the clients have formed a partnership with another Malaysian investor. The case was clearly won, the patent bought by Mather from ARX (despite Mr Muriniti’s denial).”

11 On receipt of the defendant’s response the application was on the same day referred by the Court to Mr Peter J McNally (Costs Assessor) for assessment.

12 Between 13 July and 20 August 1999, there was correspondence between the Costs Assessor and both the plaintiff and the defendant in the course of which both parties made submissions (LCM 1 at 109 to 148 – the documents are generally in reverse chronological order). In a letter of 27 July 1999 to the Costs Assessor, the plaintiff said, inter alia:

In our respectful submission nothing in the above sections, nor anywhere else in the Act or regulations that we are aware of gives the assessor the jurisdiction to determine an issue as to whether fees are in fact due and owing at any particular time. In our respectful submission an assessor’s function is to determine whether the claim made by practitioner for fees is a reasonable claim considering all sorts of other factors relating to the reasonableness of the quantum of the costs claimed but not relating to who owes whom what.
In the circumstances therefore in our respectful submission the dispute currently on foot between ourselves and Mrs Lyons is not a matter which falls within the province of the functions of a costs assessor.
We further respectfully submit that any attempt by an assessor to deal with this issue would be an act ultra vires.

13 In relation to the quantum of fees in respect of the Mather retainer, the plaintiff advised that he agreed with the amount of $24,550 but denied any liability, contingent or otherwise, for the additional $650.

14 The Costs Assessor having indicated his intention to proceed with his assessment and issue a Certificate of Determination, the plaintiff commenced proceedings no 12152/99 in this Division claiming, inter alia:

(a) A declaration that the Plaintiff was not obliged at law to make any payment in respect of the fees the subject of the costs assessment application,
(b) A declaration that such agreement as may have existed between the Plaintiff and the deceased, in respect of payment of the subject fees was conditional upon the proceedings being concluded successfully on the part of the clients and the patent in respect of a locking device, the subject of the proceedings, being sold,
(c) An order that the Costs Assessment Application be called up into this Court,
(d) An order restraining the present Defendant from presently to a proper officer of this Court for the relevant documents for the costs assessment,
(e) An order permanently restraining the Costs Assessor from proceeding with the assessment, and
(f) An order in the nature of certiorari…that the costs assessment application be removed into this Court and quashed.

15 In due course, these proceedings were heard by Davies AJ on 19 July 2000 and judgment delivered 14 July 2000 when the Summons was dismissed with costs: Muriniti v Lyons & Ors [2000] NSWSC 680.

16 In the course of his judgment, his Honour said:

[12] The summons before the Court is misconceived. It is not the function of the Court, at this stage, to hear witnesses, find facts and assess costs. The legislature has established processes for the assessment of costs.
[13] Counsel for the plaintiff submitted that the subject process of assessment of costs was futile and an abuse of process. But whether the plaintiff’s contentions, as to the oral agreement and as to the agreement to undertake pro bono work, are successful and whether reg 78(1) applies to all the services provided by Mr Lyons, are not matters to be determined at this stage by this Court. They are matters to be determined in the first instance by the costs assessor to whom the matter has been referred. Once the costs assessor has brought down his determination, any party dissatisfied with it may appeal to the Court on a point of law in accordance with s 208L of the Act or on the merits by leave in accordance with s 208M of the Act. The Act has laid down this procedure for the assessment of costs. The Court should not shortcut the procedure at the whim of a solicitor who wishes to dispense with the statutory process”.

17 An appeal was lodged against this decision by the plaintiff, but, on the advice of Senior Counsel, the plaintiff discontinued the appeal, and on 16 October 2000 it was dismissed by consent.

18 Meanwhile, on 12 October 2000, the plaintiff wrote to the Costs Assessor (LCM 1 at 80-82), and on 20 October he made further detailed submissions to the Costs Assessor (LCM 1 at 73 to 79) to the effect that no costs assessment should be made.

19 On 7 November 2000, the Costs Assessor issued his Determination along with a Certificate of Determination (LCM 1 at 69-70). In relation to the Mather retainer, he considered insufficient particulars had been provided to establish liability for the extra $650, but noted that the amount of $24,550 had been accepted by the plaintiff and his clients, and accordingly, he certified that amount as fair and reasonable. He then dealt with other submissions made about the alleged conditions to which the brief to the deceased was subject, and said:

“I consider the role of a costs assessor is to assess the bills of costs assigned to him and to determine a fair and reasonable amount for costs and fees to be paid to a practitioner. When the costs the subject of the determination are payable is not a matter for a costs assessor to determine”.

20 He concluded his determination by saying:

“I do not accept (the) submission that any assessment of costs would be ultra vires and a jurisdictional error”.

21 That same day (7 November 2000) the defendant, notwithstanding that she was aware that the plaintiff’s liability to pay the fees assessed was disputed, registered the same as a judgment in the Local Court pursuant to s 208J of the Act, and on 10 November 2000 caused a Writ of Execution to issue (Local Court proceedings no 12391/00) (LCM 1 at 177-8).

22 It was brought to the attention of the Costs Assessor that the Determination contained an error in that he had failed to include the filing fee paid for the Application for Assessment, so on 21 November 2000, he issued an Amended Certificate of Determination in the amount of $24,855.10 (LCM 1 at 68) which the defendant registered in the Local Court on 25 January 2001 (Local Court proceedings no 893/01).

23 On 27 November 2000, Sheriff’s Officers levied execution on the plaintiff’s office premises and seized a large quantity of office equipment (LCM 1 at 179). The same day the plaintiff served on the defendant an unfiled Application for Review of Costs Assessment by a costs review panel pursuant to s 208KA of the Act (LCM 1 at 174-5). This Application was in fact never filed. The plaintiff says in para 20 of his affidavit of 25 September 2002 that due to an administrative oversight at the office of his law stationers, the application was filed one day late and rejected by the Registry. I also note that the notice appears to be defective as to form as it does not state the grounds for review.

24 On 30 November 2000, the plaintiff filed a Notice of Motion and affidavit in the Local Court seeking a stay of all proceedings on the judgment registered 12391/00 and on 25 January 2000, the defendant agreed to the judgment being stayed pending the determination of all matters in issue between the parties by the Supreme Court.

25 No appeal or application for review of the costs assessment having been filed, and notwithstanding the agreed stay on the judgment in 12391/00, on 29 January 2001, the defendant caused garnishee proceedings to issue on the judgment in 893/01,which resulted in almost $25,000 being debited from the plaintiff’s office account with the ANZ Bank. He thereupon made an urgent application to the Local Court to set aside the garnishee order and the judgment and for other relief (LCM 1 at 181 to 191).

26 On 27 March 2001, the Statement of Claim in proceedings no 20210/01 was filed and the Local Court application was ultimately heard by Sweeney LCM on 29 March 2001 when, after a contested hearing, her Worship ordered that the judgment in 893/01 and the garnishee order be set aside and for the return of all funds deducted pursuant to the garnishee.

27 In his Statement of Claim as further developed in his Amended Statement of Claim filed 25 May 2002, the plaintiff has alleged the conditional nature of the Mather retainer, the non fulfilment of such conditions, and that the complaints to the Bar Association and Law Society in respect thereof, the application for the costs assessment, the registering of both Certificates of Determination as judgments in the Local Court and the issue of execution thereon constituted a breach of contract and abuse of process, and he claims damages (including aggravated and exemplanary damages), and declarations concerning the true construction of the Mather retainer and that he is not presently liable under it, interest and costs.

28 In the original, but not the Amended Statement of Claim, he also sought orders in relation to the costs in the proceedings before Davies AJ (12152/99), and an order by way of certiorari for the proceedings in the Local Court (12391/00 and 893/01) to be transferred to this Court and dealt with concurrently with these proceedings.

29 By her Defence filed 1 June 2001, (no time has yet been fixed by filing any Amended Defence) the defendant, apart from denying or not admitting some of the facts alleged, claims (para 8) that any fees agreement between the plaintiff and the deceased as alleged by the plaintiff was:

(a) void for uncertainly,
(b) an agreement which should have been in writing pursuant to the procedures of the Legal Profession Act,
(c) unenforceable due to lack of consideration, and
(d) unenforceable due to the fact that it was not in writing and was
an agreement that was required to be in writing.

30 In further answer to the whole of the Statement of Claim, she also relies (para 47) on the Amended Certificate of Determination of Costs dated 21 November 1999 and s 208J of the Legal Profession Act, and asserts (para 48) that if the Costs Assessor made an error of law in the issue of the Certificate of Determination, the plaintiff’s remedy was to have the proceedings reviewed by a Costs Review Panel pursuant to s 208KA of the Act, and the plaintiff has failed to do so.

31 The proceedings were before a Deputy Registrar for status conferences and/or directions hearings on 9 occasions between 3 October and 20 August 2002. During this time, there seems to have been unnecessary delay, mainly on the part of the plaintiff, and a number of procedural motions were filed by both parties.

32 The proceedings then came before Master Malpass on 19 September 2002. During the course of the day, there were discussions between counsel and ultimately orders were made by consent which included the grant of leave to the plaintiff to file in such proceedings a motion seeking leave to appeal from the determinations of the Costs Assessor of 7 November 2000 and 21 November 2000, leave to amend the proceedings to incorporate such appeal, consolidation of the hearing of such appeal with the hearing of the proceedings, with evidence in one case to be evidence in the other, and noted the intention of the parties to have the question of leave to appeal from the determinations of the Costs Assessor determined prior to any other substantive step in the proceedings. The various outstanding motions were otherwise dismissed.

33 Pursuant to such leave, the plaintiff, on 25 September 2002, filed the Notice of Motion which is presently before me seeking orders:

1. That the plaintiff be granted leave to appeal from the determination of the Costs Assessor dated 7 November 2000 and the Amended Certificate as to Determination of Cost dated 21 November 2000 between the plaintiff and the defendant.

2. In the alternative, that the plaintiff be granted leave to amend these proceedings to incorporate the appeal from the determination of the Costs Assessor dated 7 November 2000 and the Amended Certificate as to Determination of Costs dated 21 November 2000 between the plaintiff and the defendant.

3. That the hearing of the Summons for Appeal from the determination of the Costs Assessor dated 7 November 2000 and the Amended Certificate as to Determination of Costs dated 21 November 2000 be consolidated with the hearing of these proceedings, with evidence in one case to be evidence in the other in the event of leave being granted.

4. Further and other orders as appropriate.

5. Costs.

34 Whilst such proceedings and the Motion remained pending, on 7 February 2003, the plaintiff commenced separate proceedings (10315/03) by Summons seeking the following orders:

1. An order that the plaintiff be granted leave to appeal from the determination of the Costs Assessor PJ McNally dated 7 November 2000 and the Amended Certificate as to Determination of Costs dated 21 November 2000 between the plaintiff and the defendant.

2. An order that the determination of the costs assessor on 7 November 2000 and the Amended Certificate as to determination of costs dated 21 November 2000 be set aside.

3. A declaration that the defendant is not entitled to the payment of costs until each of the following occurred:

(i) Seija Mather succeeds in selling her lock patent the Australian Patent Application Number is 652160;
(ii) That in the event that Seija Mather did not succeed in selling her lock patent the defendant has no entitlement as against the plaintiff to costs;

35 In such proceedings, the plaintiff filed an affidavit sworn 7 February 2003 seeking leave to relay on all affidavits sworn in the earlier (20210/01) proceedings. The defendant filed a Notice of Appearance, but, as nothing further had happened, the matter was listed for Directions in the Master’s Call over on 14 November 2003 pursuant to SCR Pt 26 r 2.

36 It was faintly argued that the extension of time to apply for leave to appeal was implicitly granted by the consent orders made by Master Malpass on 19 August 2002, but this point was apparently not taken before Master Harrison, and in any event the plaintiff would still require an extension of time to institute his substantive appeal under s 208L.

37 The motion filed on 25 September 2002 came on for hearing before Master Harrison on 11 February 2003 when she reserved her decision. Judgment was delivered on 25 February 2003 when the motion was dismissed with costs, the Master holding that as the liability to pay was disputed, it was arguable that the Costs Assessor should not have proceeded with the assessment and had arguably erred in law in doing so, and that there was a triable issue between the parties, but that the plaintiff’s explanations for the delay were unconvincing, that if the plaintiff were granted an extension of time, the defendant would be put to the expense of trying to prove that a former client of the deceased had effected the sale of a lock patent after many years had elapsed, and that in the exercise of her discretion, justice was best served if the application for an extension of time to seek leave to appeal and/or to appeal were refused.

38 The plaintiff thereupon appealed (21 March 2003) and such appeal was heard by me on 6 November 2003.

39 During the hearing, by consent, I ordered that proceedings 10315/03 be consolidated with the earlier proceedings and vacated the listing of such proceedings for 14 November 2003. I also ruled that in view of the comparatively small amount involved and to more efficiently manage the proceedings, I would receive submissions not only on the issue decided by Master Harrison (i.e. whether there should be an extension of time for seeking leave to appeal and/or for appealing from the Costs Assessor), but also on whether such leave should be granted, and if so, the substantive appeal; and for this purpose gave leave to the parties to adduce additional material, if desired, and make further written submissions.

40 Pursuant to such leave, the defendant provided a bundle of further documents under cover of a letter dated 19 November 2003, (which I have caused to be marked Ex 2) and Written Submissions dated 30 January 2004, whilst the plaintiff provided Written Submissions dated 19 February 2004.

41 A new regime for the determination of the amount of costs was introduced by the amendments effected to the Legal Profession Act 1987 by the Legal Profession Reform Act 1993 which commenced on 1 July 1994. Whereas prior to that time, disputes as to the amount of costs payable had been determined by “taxation” of such costs, by taxing offices of the various courts, the new Act introduced in its place a system of “assessment” of such costs by experienced practitioners. At the same time, provision was made for costs agreements and it became possible for barristers to sue solicitors for unpaid fees because they all by statute became “legal practitioners” instead of barristers or solicitors respectively.

42 The provisions relating to costs are contained in the new Part 11 of the Act. Section 184(2) provides that “costs agreements” include an agreement for the provision the services of another barrister or solicitor, and subs (4) provides that such an agreement is void if not in writing, whilst s 186 deals with “conditional costs agreements”. It may also be necessary to have regard to the transitional provisions contained in both the Act and the Regulation.

43 Assessment of Costs is dealt with in Division 6 of Part 11. A barrister or solicitor who has given a bill of costs in accordance with the Part may apply to the Manager, Costs Assessment for an assessment of the whole or any part of those costs (s 201). Provision is made for the making of the applications (s 203), the giving of notice of such applications (s 204), and referral of such applications by the Manager, Costs Assessment to a Costs Assessor (s 205). Pursuant to s 207, a Costs Assessor may require production of documents and further particulars, and may require such further particulars to be verified by statutory declaration.

44 A Costs Assessor is not bound by the rules of evidence and may inform himself or herself in such manner as he or she may think fit (s 208(2)), and for the purposes of determining whether an application for assessment may be or is required to be made, or for the purpose of exercising any other function, a Costs Assessor may determine inter alia, whether a costs agreement exists, and its terms (s 208(3)). Sections 208A and 208B set out matters that are required to be taken into account, or may be taken into account, by the Costs Assessor.

45 Section 208J provides that on making a determination, the Costs Assessor is to issue to each party a certificate that sets out the determination, and subs (3) provides that, in the case in an amount of costs that has not been paid, the certificate may be filed in a court having jurisdiction to order the payment of that amount of money and shall thereupon be taken to be a judgment of that court for the amount of the unpaid costs, whilst s 208JAA requires the Costs Assessor to ensure that the Certificate issued under s 208J is accompanied by a statement of the reasons for his or her determination. Section 208JB enables correction of an error in the determination whilst s 208K provides a Costs Assessor’s determination is binding all parties to the application and no appeal or other review lies in respect of the determination except as provided by the Division.

46 A party who is dissatisfied with an assessment may have it reviewed by a panel of 2 costs assessors which may affirm the original assessment or set it aside and substitute its own assessment: ss 208KA – 208KL.

47 Subdivision 4B of Part 11 provides for appeals and the relevant provisions are as follows:

208L Appeal against decision of costs assessor as to matter of law
(1) A party to an application who is dissatisfied with a decision of a costs assessor as to a mater of law arising in the proceedings to determine the application may, in accordance with the rules of the Supreme Court, appeal to the Court against the decision.
(2) After deciding the question the subject of the appeal, the Supreme Court may, unless it affirms the costs assessor’s decision:
(a) make such determination I relation to the application as, in its opinion, should have been made by the costs assessor, or
(b) remits its decision on the question to the costs assessor and order the costs assessor to re-determine the application.
(3) On a re-determination of an application, fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given.
208M Appeal against decision of costs assessor by leave
(1) A party to an application relating to a bill of costs may, in accordance with the rules of the Supreme Court, seek leave of the Court to appeal to the Court against the determination of the application made by a costs assessor.
(2) A party to an application relating to costs payable as a result of an order made by a court or a tribunal may, in accordance with the rules of the court or tribunal, seek leave of the court or tribunal to appeal to the court or tribunal against the determination of the application made by a costs assessor.
(3) The Supreme Court or court or tribunal may, in accordance with its rules, grant leave to appeal and may hear and determine the appeal.
(4) An appeal is to be 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.
(5) After deciding the questions the subject of the appeal, the Supreme Court or court or tribunal 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.

208N Effect of appeal on application
(1) If a party to an application has appealed against a determination or decision of a costs assessor, either the costs assessor or the court or tribunal to which the appeal is made may suspend, until the appeal is determined, the operation of the determination or decision.
(2) The costs assessor or the court or tribunal may end a suspension made by the costs assessor. The court or tribunal may end a suspension made by the court or tribunal.

48 Section 208S provides for the appointment of Costs Assessors by the Chief Justice and it further provides that when acting as a Costs Assessor, such person is not an officer of the Court. Schedule 7 of the Act relates to Costs Assessors and provides, inter alia, that the persons eligible for appointment as such are barristers or solicitors of at least five years standing.

49 The Supreme Court Rules provide that any appeals in accordance with such rules must be instituted within 28 days or within such extended time as the Court may fix: Pt 51A r 3; and that an application for leave to appeal is to be filed within 14 days or such extended time as the Court may fix: Pt 51A r 2(3).

50 The plaintiff therefore requires an extension of time to appeal under s 208L on a matter of law and an extension of time to seek leave to appeal generally (not limited to questions of law) under s 208M; and if such latter extension of time is granted, he still requires leave to appeal under the latter section. On either appeal, the Court can receive fresh evidence: ss 208L(3), 208M(4).

51 In considering an application for leave to appeal under s 208M it is important to bear in mind that the purpose of the requirement for leave is to act as a filter to ensure that unsuitable appellant proceedings are not brought which have no prospects of success, but it is also important that s 208M be considered in the context of s 208L which provides for an appeal as of right on a matter of law, and it is appropriate to consider if no matter of law is involved, whether there is some other matter which in justice requires that leave be granted to allow the matter to be relitigated; Chapmans Limited v Yandells [1999] NSWCCA 361 at [11]-[12].

52 In considering whether an extension of time should be granted, the Court must look at the whole of the circumstances, including whether there is an adequate explanation for the delay, but the refusal of relief to an applicant is not automatically justified because he has failed to establish such adequate explanation for the delay; such a failure must be considered in the light of all the circumstances, including what if any, prejudice will flow to the other party by the grant of such extension; and if merits are shown the Court will not prima facie desire to let a judgment pass on which there has been no proper adjudication: Adams v Kennick Trading (International) Ltd (1986) 4 NSWLR 503 at 506 citing Evans v Bartlam [1937] AC 473 at 489.

53 It is not the case that delay MUST be satisfactorily explained before discretion can be exercised in favour of an applicant, and gross negligence does not necessarily prevent the exercise of the discretion, but only causes the court to examine more closely the question whether there really is a triable issue going to the merits: Cohen v McWilliam (1995) 38 NSWLR 476 at 479 per Priestley JA and cases cited including his Honour’s quotation from the judgment of Griffiths CJ in Rowe v Australian United Steam Navigation Co Ltd (1909) 9 CLR 1 at 6,

“(that) the right of every man to a fair hearing before he is condemned lies at the root of the tree of justice”.

54 Under the process introduced by the 1993 Act, the assessment of costs is entrusted to “assessors” appointed by the Chief Justice being barristers or solicitors of at least 5 years standing. An “assessor” is one who assesses, taxes or estimates the value of property (or work), whilst “assess” means to “fix amount” or “estimate value”: Concise Oxford Dictionary, 6th ed (1976). See also Macquarie Dictionary (1981) at 141-2. In construing a covenant in a lease, “assessed” was said to mean “reckoned on the value”: Floyd v Lyons [1897] 1 Ch 633. The essential quality of such an assessor is to fix an amount or to put a value on something such as property or services. There is another type of assessor such as nautical assessors in Admiralty cases, called in to assist and advise the judge on technical matters, but without any deliberative voice: Jowitt: Dictionary of English Law (1959) at 162; but such assessors are irrelevant to the present discussions.

55 A Costs Assessor under the Act is not an officer of the Court when acting as such; s 208(4), is not part of the Supreme Court and has no power to take sworn evidence or resolve conflicts of evidence: Ryan v Hansen [2000] NSWSC 354, 49 NSWLR 184.

56 Having regard to the status and powers of Costs Assessors and the ordinary meaning of the word “assessor”, I am satisfied that the powers of Costs Assessors are limited to determining the value of the work done or services rendered in circumstances where there is no dispute that costs are payable and the only issue is as to the amount. It is no part of their function to determine whether or when such costs are payable. The matters set out in s 208A which they must, and in s 208B which they may, take into account are all matters relevant to putting a value on the work done or services rendered and the fairness or justice of the amount claimed; but are not matters which relate to the terms of a costs agreement (particularly if oral) and whether any conditions precedent to payment have been fulfilled. The determination of such questions requires the reception of sworn evidence, which can be tested by cross-examination, and an assessment of such evidence. Costs Assessors do not have the power to deal with such matters.

57 For similar reasons it has been held that a Costs Assessor has no power to hear a cross-claim by a client against a solicitor based on negligence, nor to award damages: Ryan v Hansen, supra per Kirby J; or to make an assessment when no costs are presently due and payable: Lace v Younan [1999] NSWSC 1072 per Master Harrison (no bill of costs rendered); Baker v Kearney [2002] NSWSC 746 per Master Malpass (judgment in District Court that applicant for assessment not entitled to costs). I am therefore satisfied that on being notified of the dispute as to the plaintiff’s liability to pay the costs, the Costs Assessor should have declined to make a determination or issued a certificate unless and until such issue was resolved.

58 It could never have been the intention of the legislature that where the liability for a debt for costs was disputed, a party to the dispute could render the other party to the dispute liable for the debt without any judicial determination of the disputed issues between them simply by having the value of the work assessed by a Costs Assessor and the certificate of determination registered as a judgment in a court of competent jurisdiction. Yet this is precisely what the defendant has sought to do in the present case.

59 In his judgment of 14 July 2000 in no 12152/99 at [13] Davies AJ appears to have taken a different view and indicated that the plaintiff’s contentions as to the agreement and otherwise were matters to be determined in the first instance by the Costs Assessor and then be dealt with by this Court on appeal pursuant to s 208L or 208M, although para [4] of the judgment suggests that the issue now under consideration was not raised in that case. With all respect to his Honour, for the reasons already given, I take a different view.

60 In any event the judgment of Davies AJ, not having been upset on appeal, is binding as between the present parties; but it follows from what I have already said that I consider the plaintiff has reasonable grounds to appeal under s 208L on the question of law namely whether when the liability for costs is disputed and there has been no curial determination of liability to pay, it is open to Costs Assessor to make a determination or issue the relevant certificate.

61 I am also satisfied that there is a bona fide dispute on the facts as to the terms of the retainer, and in particular whether it was contingent on success in the relevant proceedings and the sale of the patent, and if so, whether the transfer of the patent to one of the three clients as consideration for her taking over the debts of one of the other parties who was insolvent, and which therefore did not generate any additional funds, constitutes a “sale” of the patent in the context of such agreement.

62 If the question of law sought to be raised under s 208L were decided adversely to the plaintiff, these matters would be appropriate for an appeal generally under s 208M, on which the plaintiff would at least have an arguable case, particularly as, in a letter to the Law Society of New South Wales dated 20 July 1998, the defendant wrote:

I can only reiterate that in the ARX, Koopman, Mather matters that these four people came together for the first time at the first conference. That Robert (the deceased) is not here to say what took place but that he told me he was owed approximately $40,000, that this was a contingency matter that required the case to be won and the patent to be sold. Both these conditions have been fulfilled” (LCM 1 at 37).

63 I therefore return to consider the question of delay.

64 Like Master Harrison, I find it difficult to accept the plaintiff’s explanation for his delay in instituting his appeal from the decision of the Costs Assessor, which seems to amount to saying that he did not know the appropriate procedure to follow, although Davies AJ in his judgment of 14 July 2000 and the letter from the plaintiff to the Costs Assessor dated 12 October 2000, both made clear reference to an appeal under s 208L, and in the case of the former, s 208M as well.

65 It seems that having obtained by agreement a stay on the Local Court judgment registered 12391/00 pending the outcome of these proceedings, and the judgment in 893/01 having been set aside, he was prepared to do nothing, hoping that the problem would simply go away. On the other hand, the defendant, for the same reasons, has not been prejudiced by the delay except that if she is entitled to the money claimed, she has been kept out of it for some time, but such prejudice can be remedied if appropriate, by an award of interest.

66 The Master was concerned that if the plaintiff were granted an extension of time, the defendant would be put to the expense of trying to prove that a former client of her deceased husband had effected the sale of a lock patent after many years have elapsed. But I do not consider this to be a substantial problem. There is a Register of Patents: Patents Act 1952 (Cth) s 20, in which assignments etc are registered: s 21; and which is open for public inspection: s 28. See also Ex B. There is no evidence that Ms Mather is unavailable or that documents relating to the alleged assignment are not available.

67 Another factor relevant to granting an extension of time is the general importance of the question of whether Costs Assessors have power to make determinations when the liability to pay costs is non-existent or disputed. But in addition to all these matters, the most important consideration is that there is a bona fide dispute as to the liability of the plaintiff to pay the costs, and that dispute has never been the subject of a determination on the merits.

68 For these reasons I am satisfied that the Master’s discretion miscarried, and that the necessary extensions of time should be granted. The appeal under s 208L is of right and for the reasons already given I would allow that appeal and hold that having been made aware that the plaintiff’s liability to pay costs was disputed, the Costs Assessor had no power to determine the amount of such costs or issue the certificates of determination.

69 In view of that finding, leave to appeal on the factual issues under s 208M becomes otiose, but in case I am in error in my construction of the Act, I would also grant leave to appeal under s 208M. As I have indicated the determination of those issues requires a proper hearing with relevant and admissible evidence directed to such issues. This can be accommodated with the final hearing of the issues raised in the plaintiff’s Amended Statement of Claim in 21210/01, although it would probably be appropriate for the defendant to file a cross-claim in such proceedings seeking the costs she claims.

70 Having regard to the comparatively small amounts involved and the lengthy delays which have already occurred, I consider I should case manage the proceedings so that they can be made ready for an early hearing, but that because of my involvement to date, the final hearing should be before a different judge.

71 I will hear the parties on the form of the orders to be made, but subject thereto I consider appropriate orders would include:-

(1) Allow appeal,
(2) Set aside order of Master of 25 February 2003,
(3) Extend time for instituting appeal under s 208L and application for leave to appeal under s 208M until 25 September 2002 (the date of filing of the Notice of Motion),
(4) Grant plaintiff leave appeal under s 208M,
(5) Set aside determinations of Costs Assessor in matter no 91106/99 as set out in his certificates dated 7 and 21 November 2000,
(6) Order that proceedings no 12391/00 in the Local Court at 143-147 Liverpool Street, Sydney be removed into this Court and quashed,
(7) Directions for further conduct of the proceedings,
(8) Costs of the motion (another matter on which I would like to hear submissions, including whether the defendant should have a certificate under the Suitor’s Fund Act 1951 ) .

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Last Modified: 03/10/2004