New South Wales Insurance Ministerial Corp v Ginman

[1999] NSWSC 444

CITATION:	New South Wales Insurance Ministerial Corp v Ginman [1999] NSWSC 444
CURRENT JURISDICTION:	Common Law
FILE NUMBER(S):	13185/98
HEARING DATE(S):	4 May 1999
JUDGMENT DATE:	14 May 1999
PARTIES :	New South Wales Insurance Ministerial Corporation v Lisa Ann Ginman
JUDGMENT OF:	Master Harrison

COUNSEL :	Mr G W McGrath (Plaintiff) Mr G Lucarelli (Defendant)
SOLICITORS:	Mr J M Crestani, Parramatta (Plaintiff) Ms M McCue of G H Healey - Bondi (Defendant)
CATCHWORDS:	Appeal against decision of costs assessor
ACTS CITED:	Legal Profession Act 1987 - s 208L & s 208F(1) & (1A) Legal Profession Amendment Act 1996 Supreme Court Rules - Pt 52A 7 33(4)
DECISION:	See para 13

8

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER HARRISON

FRIDAY, 14 MAY 1999

13185/98 - NEW SOUTH WALES INSURANCE MINISTERIAL
CORPORATION v LISA ANN GINMAN

JUDGMENT (Appeal against decision of costs assessor)

1 MASTER: The appellant by summons filed 31 December 1998 appeals against the decision of costs assessor Mr P Johnstone made on 10 December 1998 and seeks an order that decision be set aside. The appellant relies on s 208L of the Legal Profession Act 1987. The applicant relied on the affidavit of Joseph Michael Crestani sworn 16 February 1999.
2 Section 208L of the Legal Profession Act provides:
"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 matter 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 in relation to the application as, in its opinion, should have been made by the costs assessor, or

(b) remit 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."

3 The facts are not in dispute. They are as follows.

(1) On 15 February 1996 Abadee J gave judgment in relation to an action for damages brought by Lisa Ginman (the respondent in these proceedings) who suffered injuries in a motor vehicle accident. His Honour awarded the plaintiff the sum of $38,037.40 and entered judgment accordingly. His Honour ordered the defendant to pay the plaintiff’s costs to be determined by the amount recovered.

(2) On 20 September the appellant filed an application for assessment of party/party costs in the proceedings.

(3) On 26 October 1998 the respondent served a statement of objection to the appellant’s bill of costs.

(4) On 17 November 1998 the appellant served a reply to the notice of objection.

(5) On 10 December 1998 the costs assessor issued a certificate of determination assessing costs and disbursements in the sum of $17,195.

(6) On 17 December 1998 the costs assessor provided his reasons. He stated:


“1. I applied Part 52A Rule 33(4)(d) of the Supreme Court Rules to the solicitor’s costs to 1 July 1994.

In my discretion I did not apply the Rule to:


(a) disbursements;

(b) solicitor’s costs after 1 July 1994.

2. My reasons are:


(a) More probably than not the applicant had reasonable grounds at the time of commencement of proceedings for considering that the Supreme Court was an appropriate jurisdiction.

(b) The Respondent suffered no prejudice by reason of commencement in the Supreme Court in terms of quantum of costs recoverable for disbursements, or for deregulated professional fees post 1 July 1994. These costs would have been of substantially the same order even if the Applicant had commenced proceedings in the District Court.”

4 The issue to be determined is whether the costs assessor had a discretion in relation to the application of Part 52A r 33(4)(d) of the Supreme Court Rules. The appellant submitted that the costs assessor failed to apply the 50% deduction to disbursements as well as to the professional costs, whereas both the Legal Profession Act and the Supreme Court Rules make the deduction applicable to both costs and disbursements. The respondent submitted that it is entirely unnecessary for the court on this application to consider the issue of whether the costs assessor was entitled to exercise a discretion pursuant to Part 52A r 33(5) or the issue of whether the discretion found in r 33(5) is conferred on the court alone because the costs assessor had a discretion to apply r 33(4). According to the respondent this discretion originates from s 208F(1A) of the Legal Profession Act.
5 From the judgment of Abadee J, the personal injury action to which the costs assessment relates was commenced in 1987. The plaintiff recovered $38,037.40. Hence, the relevant portions of Part 52A r 33(4) and (5) of the Supreme Court Rules provide:

“(4) Subject to subrule (5) where, by or under the rules or any order of the Court, the plaintiff is entitled to his or her costs of any proceedings to which this rule applies, the amount of costs payable to him or her shall -
…

(d) in respect of proceedings commenced after 31 March 1983, but on or before 30 June 1993, where he or she recovers a sum more than $10,000 but not more than $50,000, be only a half of the whole amount;

…

(5) In a case to which subrule (4) applies, if it appears to the court that the plaintiff has sufficient reason for commencing or continuing proceedings in the court, the court may order that the amount of costs payable to the plaintiff be some greater part or the whole of the amount which would be payable to him or her apart from the subrule.”

6 Sections 208F(1) and (1A) of the Legal Profession Act say:

“Assessment of costs - costs ordered by court or tribunal
(1) When dealing with an application relating to costs payable as a result of an order made by a court or tribunal, the costs assessor must consider:


(a) whether or not it was reasonable to carry out the work to which the costs relate, and

(b) what is a fair and reasonable amount of costs for the work concerned.


(1A) An assessment must be made in accordance with the operation of the rules of the relevant court or tribunal that made the order for costs.

…”

7 Subsection 208F(1A) was introduced by the schedule 2[8] of the Legal Profession Amendment Act 1996 (No 95). The second reading speech does not assist in determining to what Parliament intended to achieve by adding the subsection. But the “Explanatory Notes” referred to in the second reading speech of 24 October 1996 and which accompanied the bill refer to s 208F. The Explanatory Note says:

“Procedure for assessments
Section 208F, which deals with the assessment of costs ordered by a court or tribunal, is amended so as to require a costs assessor, when considering an application relating to a bill of costs, to have regard to the operation of the rules of the court or tribunal making the order for costs. (See Schedule 2[8])”

8 In interpreting s208F(1A) I do not think that it is necessary to have regard to the explanatory note to interpret s 208F(1A). The subsection is expressed in clear terms. Section 208F requires the costs assessor to firstly determine whether it was reasonable to carry out the work and what is a fair and reasonable amount of the costs. The costs assessor must make an assessment in accordance with the rules of the relevant court that made the order for costs. Section 208F(1A) is mandatory as it says that the assessor “must” make his or her assessment in accordance with the relevant rules of the court. Section 208F (1A) does not give the costs assessor a discretion.
9 The rule of court that the costs assessor was obliged to apply was Part 52 r 33(4). The costs assessor applied this rule in relation to solicitor’s costs prior to 1 July 1994 but stated that in the exercise of his discretion he did not apply the rule to disbursements and solicitor’s costs after 1 July 1994.
10 In s 19 of the Supreme Court Act costs are defined. Costs include fees, charges, disbursements, expenses and remuneration. Section 52A r 33(4) is to be applied unless a court orders that the amount of costs payable to the plaintiff be some greater part or the whole of the amount which would be payable to him or her apart from the subrule. In other words Part 52A r33(4) applies unless the court otherwise orders in accordance with Part 52 r 33(5). A costs assessor cannot make an order in accordance with Part 52 r 33(5) as according to s 208S(4) of the Legal Profession Act he or she is not an officer of the court when acting as a costs assessor. In any event, Abadee J did not make an order pursuant to Part 52 r 33(5) but rather ordered that the plaintiff’s costs be determined by the amount recovered. His Honour stipulated that Part 52 r 33(4) should be applied.
11 The costs assessor was obliged to apply Part 52 r 33(4) and did not have a discretion to act other than in accordance with the rule. He should have allowed only half of the whole amount that he assessed as a fair and reasonable amount of costs The plaintiff has discharged its onus. I am satisfied that the costs assessor has erred in law. I uphold the appeal and set aside the determination made by the costs assessor on 10 December 1998.
12 If the parties can agree on the amount that should have been allowed I can make a determination in accordance with s 208L(2)(2) and this would save the time and expense of referring the matter back to the costs assessor for re-determination. However, while the parties agree on the arithmetic, the respondent wishes to be heard in relation to the assumption upon which the arithmetic is based. The matter ifs stood over to a date to fixed to allow this to be done. Costs should follow the event. The respondent is to pay the appellant’s costs.
13 The court orders:

(1) The appeal is upheld.

(2) The determination made by Mr P Johnstone, the costs assessor on 10 December 1998 is set aside.

(3) The respondent is to pay the appellant’s costs.

(4) The matter is to be stood over to a date to be fixed to ascertain whether I should make a determination as to costs or remit the matter to the costs assessor to re-determine the application.
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Last Modified: 05/17/1999