Nano Logistics Pty Ltd v Harper James Law Group Pty Ltd

[2024] NSWSC 251

Supreme Court

New South Wales

Medium Neutral Citation:

Nano Logistics Pty Ltd v Harper James Law Group Pty Ltd [2024] NSWSC 251

Hearing dates:

14 March 2024

Date of orders:

14 March 2024

Decision date:

14 March 2024

Jurisdiction:

Common Law

Before:

Chen J

Decision:

(1) Summons filed 28 November 2023 is dismissed.

(2) Order the plaintiffs to pay the defendant’s costs of the summons.

Catchwords:

COSTS – solicitor/client – application to appeal out of time a Costs Determination Certificate entered as a judgment of the Local Court – where procedure for appeal to review panel has not been followed – where the Court has no power to make the orders sought by the plaintiffs in the circumstances – application dismissed

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Legal Profession Uniform Law Application Act 2014 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Nano Logistics Pty Ltd v Raby Omran [2024] NSWSC 236

Category:

Principal judgment

Parties:

Nano Logistics Pty Ltd (first plaintiff)
Hany Rohaim (second plaintiff)
Opeti John Kei (third plaintiff)
Harper James Law Group Pty Ltd (defendant)

Representation:

Counsel:
J Glissan KC (plaintiffs)
M Youssef (defendant)

Solicitors:
Edmond Khoury Solicitors (plaintiffs)
Hugo James Law Group (defendant)

File Number(s):

2023/00430096

Publication restriction:

Nil

JUDGMENT ex tempore

Introduction

1. This matter arises out of a costs dispute between three plaintiffs and their former solicitor.

2. The first plaintiff is Nano Logistics Pty Ltd, the second plaintiff is Hany Rohaim and the third plaintiff is Opeti Kei. The second and third plaintiffs are, and were at the relevant times, directors of the first plaintiff. The defendant is Harper James Law Group Pty Ltd.

3. The dispute, in simple terms, arises out of the following. The defendant sent the plaintiffs a bill of costs for the work they had performed, and disbursements incurred, in February 2022, which was not paid. The defendant applied to have its costs assessed. An assessment of the solicitor and client costs took place in 2023, and a Certificate of Determination of Costs thereafter issued dated 7 September 2023. The defendant filed that certificate in the registry of the Local Court – and the amount referred to in that certificate ($96,035.98) became a judgment of that Court. The defendant now seeks to enforce that judgment against the second and third plaintiffs by the filing and service of a bankruptcy notice upon them.

4. By summons filed 28 November 2023, the plaintiffs seek the following order (summons, par 1):

That leave be granted to appeal out of time the Costs Determination Certificate dated 15 May 2023 entered as a judgment in the Local Court of New South Wales on 26 September 2023 for the sum of $96,035.98.

5. The plaintiffs also sought other substantive orders – that the “Costs Determination be stayed instanter and the Local Court Judgment be set aside” (summons, par 2) and that “the Cost Assessment be set aside” (summons, par 3).

Background facts

6. I will briefly sketch the facts in order to explain the background to this application.

7. In or around February 2019, the plaintiffs retained the defendant to provide legal services in connection with a breach of contract dispute that the first plaintiff had with R D Supplies Pty Ltd (‘RD’). Coincidently, that dispute was determined on 7 March 2024 by orders of Kunc J: see Nano Logistics Pty Ltd v Raby Omran [2024] NSWSC 236.

8. The plaintiffs agree that they entered into, and signed, a Costs Disclosure & Cost Agreement with the defendant dated 14 March 2019, but say that this agreement was a “sham”: it is said that it was “never intended for this agreement to be binding between the parties”: affidavit of Hany Rohaim affirmed 20 February 2024, par 4. The plaintiffs’ essential contention is that there was an underlying verbal agreement with the defendant – notably, made with a solicitor director of the defendant, Mona Youssef – “that all legal fees, costs, and disbursements would be no more than 20% of the monies recovered from the verdict if any in the case against RD”: affidavit of Hany Rohaim affirmed 20 February 2024, par 5. See also the affidavit of Hany Rohaim affirmed 17 November 2023, par 4.

9. As it happens, the plaintiffs recorded the meeting between them and the solicitor director of the defendant at the time this verbal agreement was entered into, which is said to confirm the existence and accuracy of what Mr Rohaim has alleged.

10. Skipping over some of the detail, on 16 February 2022, a solicitor from the defendant sent the second and third plaintiffs copies of invoices “finalising this matter” with the defendant and also advising that the defendant “no longer acts for clients or conducts legal practice, excepting for a few matters now being finalised”. The invoice that was attached was from Harper James Law Group dated 9 February 2022, with a total amount due of $90,415.60 and an itemised bill. The total of the bill was $93,057.73 but money paid on trust ($2,642.13) was applied in reduction of this amount, resulting in the amount due as indicated.

11. On 28 December 2022, the defendant filed an application to have the costs assessed. The amount of the costs claimed was $90,415.60. The costs respondents were the three plaintiffs.

12. In a letter sent to the second plaintiff by the Manager, Costs Assessment, the plaintiff parties were advised that any “objections to the application must be lodged in writing and in triplicate…by 17 February 2023”.

13. No objections were filed at this time, or at all.

14. On 28 February 2023, the application for assessment of costs was allocated to a costs assessor. The costs assessor, on 1 March 2023, emailed the parties in respect of the application, requesting certain material on or before 17 March 2023. No response was received from the plaintiffs.

15. The plaintiffs’ evidence seeks to explain, at least in part, why there was no response to the letter sent by the Manager, Costs Assessment and the email sent by the costs assessor. Given the view I have reached, it is neither necessary nor appropriate to say anything about that evidence and the explanations proffered.

16. The costs assessor, in the Statement of Reasons dated 14 May 2023, determined that the “costs are fair and reasonable and were reasonably incurred” and therefore the costs to be paid are in the sum of $93,057.73 inclusive of GST (plus filing fee and costs of assessment).

17. On 15 May 2023, the certificate issued by the costs assessor was sent to the Manager, Costs Assessment and that certificate was sent to the parties on 7 September 2023. The total amount specified in the certificate was $93,988.30. Another certificate issued on 7 September 2023 recorded that the plaintiffs were to pay the costs of the defendant in connection with the costs assessment in the sum of $2,978.25.

18. On 26 September 2023, a judgment was entered in the Local Court in the amount of $96,035.98. (The amount of this judgment does not precisely coincide with the amounts referred to in the certificates, above, but no point was taken about this nor was the discrepancy explained). The basis for the judgment were the certificates issued. Upon that filing, each became a judgment of the Court: ss 70(5) and 71(3) of the Legal Profession Uniform Law Application Act 2014 (NSW) (‘LPULA Act’).

19. On 8 November 2023, the plaintiffs filed a Notice of Motion in the Local Court, essentially seeking that the judgment be set aside or stayed. On that day, the Local Court refused the application and provided some reasons for doing so. One of them included the following:

the Registration of the Costs Assessment Certificate in the Local Court will only be set-aside in the event that the Cost Assessment Division makes an order setting aside the determination of [the] Costs Assessor…dated 15/5/23.

20. On 10 November 2023, a bankruptcy notice issued identifying the debtors as the second and third plaintiffs. The debt in the bankruptcy notice was the judgment sum – $96,035.98.

The basis for the orders

The plaintiffs’ submissions

21. The plaintiffs filed written submissions that identified the basis for making the orders sought. There it was said (plaintiffs’ outline of submissions, pars 1 and 2):

1) The Court has general jurisdiction to hear an Appeal on a Costs Assessment or in its discretion refers it to the Costs Assessment Appeal Panel. The present application is not an application in relation to quantum of costs.

2) The Court has an inherent or supervisory jurisdiction in relation to its own process and the conduct of its practitioners.   

22. Otherwise, the written submissions did not identify the power of the Court to make the orders sought in the particular circumstances.

Prayer 1: leave to appeal out of time the Costs Determination Certificate

23. The first order sought by the plaintiffs was an order granting them “leave…to appeal out of time the Costs Determination Certificate”.

24. Once the certificate issued following the costs assessment, the plaintiffs were entitled to apply for a review of that determination “within 30 days after the certificate of determination by the costs assessor has been forwarded to the parties in accordance with the regulations or the costs assessment rules”: s 83(1) of the LPULA Act. The application for a review must be filed with the Manager, Costs Assessment: s 83(3) of the LPULA Act. The review is conducted by a review panel: s 85 of the LPULA Act. The Manager, Costs Assessment “may extend the period for lodging an application” for a review: s 83(1A) of the LPULA Act.

25. The Manager, Costs Assessment is a registrar appointed to the position by the Chief Justice: s 93B(1) of the LPULA Act. By s 93B(3) of the LPULA Act, the “acts and decisions of the Manager, Costs Assessment are reviewable by the Supreme Court in the same manner as acts and decisions of other registrars are reviewable by the Court”. This has the consequence that any decision made by the Manager, Costs Assessment is reviewable under r 49.19 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’).

26. Here, the costs assessment has not been the subject of a review by a review panel, nor has an application been filed for such a review to occur pursuant to s 83(1) of the LPULA Act. To the extent that any application is to be made, it is not made to this Court but to the Manager, Costs Assessment: s 83(3). And, to the extent any extension of time is needed, that is a matter for the Manager, Costs Assessment who “may extend the period for lodging an application” by a party for a review of the costs determination: s 83(1A).

27. The plaintiffs submitted that this Court has “general jurisdiction to hear an Appeal on a Costs Assessment”. That submission is only partly accurate. The power of this Court to hear an appeal is rather more constrained. A party to a costs assessment can only appeal to this Court when that costs assessment has been the subject of a review by a review panel under Part 7 of the LPULA Act: s 89 of the LPULA Act.

28. Here, as earlier noted, the costs assessment has not been the subject of a review by a review panel, nor has an application been filed for such a review to occur pursuant to s 83(1) of the LPULA Act.

29. In my view, there is no basis to make the first order sought by the plaintiffs.

Prayer 2: an order staying the costs determination

30. The Court has power to grant a stay of any proceedings before it: s 67 of the Civil Procedure Act 2005 (NSW) (‘CPA’).

31. But, here, there are no proceedings before the Court – only a summons seeking, inter alia, a stay. This Court has not made any orders, and the judgment entered was in the Local Court. The plaintiffs did not identify any authority that might tend to suggest that the issuing of the Certificate of Determination of Costs constitutes a “proceeding” within s 67, and in my view, it is not.

32. The Court also has power to give directions with respect to the enforcement of its judgments and orders: s 135 of the CPA. But, again, this Court has not made any orders, and the judgment entered was in the Local Court.

Prayers 2 and 3: setting aside the Local Court judgment and the costs assessment

33. The plaintiffs also sought an order that the Local Court judgment be set aside. The only way in which that order could be set aside by an order of this Court would be following an appeal or, possibly, following proceedings for judicial review. There are no such proceedings in this Court and, even if there were, an order of that kind could only be made after the hearing of it.

34. The rules make provision for setting aside judgments or orders (see rr 36.15 and 36.16 of the UCPR). However, the engagement of those rules is a matter for the court making the judgment or order, not some other court. These rules do not, therefore, avail the plaintiffs.

35. To the extent that the plaintiffs sought an order “setting aside” the costs assessment, that could only occur following the hearing of any appeal under s 89 of the LPULA Act. No appeal under that section has been brought. Nothing more need be said about it.

Orders

36. In my view, there is simply no basis upon which to make the orders sought by the plaintiff.

37. I therefore make the following orders:

1. The summons filed 28 November 2023 is dismissed.

2. Order the plaintiffs pay the defendant’s costs of the summons.

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Decision last updated: 14 March 2024