Pierson v Holden and Ors t/as Garland Hawthorn Brahe

[2004] NSWSC 46

CITATION:	Pierson v Holden & Ors t/as Garland Hawthorn Brahe [2004] NSWSC 46
HEARING DATE(S):	3 December 2003
JUDGMENT DATE:	20 February 2004
JURISDICTION:	Common Law
JUDGMENT OF:	Master Harrison
DECISION:	(1) The appeal is dismissed; (2) The decision of the review panel dated 22 June 2001 is affirmed; (3) The amended sumons filed 1 July 2003 is dismissed; (4) The plaintiff is to pay the defendant's costs as agreed or assessed.
CATCHWORDS:	Appeal: costs review panel's decision
LEGISLATION CITED:	Legal Profession Act 1987 - s 208 Legal Profession Regulations 2002 - s 61
CASES CITED:	Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 Azzopardi v Tsman UEB Industries Ltd (1985) 4 NSWLR 139 Cachia v Isaacs & Ors (1985) 3 NSWLR 366
PARTIES :	Charles Pierson (Plaintiff) Michael Geoffrey Anthony Holden, Ian John Benecke, Stephen Edward Martin and Brendan John Miller t/as Garland Hawthorn Brahe (Defendant)
FILE NUMBER(S):	SC 12268/2001
COUNSEL:	Mr D R Pritchard (Defendant)
SOLICITORS:	Mr P Beazley of Beazley Singleton (Plaintiff) Mr I Kirkman of Garland Hawthorn Brahe (Defendant)

LOWER COURTJURISDICTION:	Costs Review Panel
LOWER COURT FILE NUMBER(S):	N/A
LOWER COURT JUDICIAL OFFICER :	Panel Members P R Brewster & J S Cockle

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER HARRISON

FRIDAY, 20 FEBRUARY 2004

12268/2001 - CHARLES PIERSON v MICHAEL GEOFFREY ANTHONY HOLDEN & ORS t/as GARLAND HAWTHORN BRAHE

JUDGMENT (Appeal: costs review panel’s decision)

1 MASTER: By further amended summons filed 1 July 2003, the plaintiff seeks, firstly, an order that the decision of the costs review panel dated 22 June 2001 affirming the costs assessor’s decision of 20 July 2000 be set aside and be referred to another costs assessor for determination in accordance with the law; secondly, that the defendant pay the plaintiff’s costs of these proceedings and the costs assessments before the assessor and the costs review panel. The plaintiff relies on his own affidavits sworn 31 August 2001, 7 February 2003 and 11 June 2003. The defendants rely on the affidavit of Denita Anne Watts sworn 2 October 2001.

2 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by the plaintiff. Section 208L of the Legal Profession Act 1987 (the Act) provides a right of appeal to a party against a decision of a costs assessor as to a matter of law to this court. After deciding the question which is 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, or remit its decision on the question to the costs assessor and order the costs assessor to re-determine the application. The reference to costs assessor above is a reference to the panel (see s 208K(1)).

3 The onus lies on the plaintiff to demonstrate that there has been an error of law. What is a question of law (as opposed to a question of fact) was considered, inter alia, in Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 and Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156.

4 On 10 August 2000, the plaintiff made an application for review of the costs assessor’s determination by a cost review panel. On 22 June 2001, the panel affirmed the costs assessor’s determination.

Grounds of appeal

5 The plaintiff alleges that there has been an error of law on three grounds. The first area of appeal is that the plaintiff has been denied natural justice or that there has been a failure on the part of the costs assessment panel to comply with s 208KG of the Act in that: (i) the defendants (GHB) did not produce any time sheets, despite requests by the costs assessor, until the day before the costs assessor issued his certificate of determination (ii) the costs review panel refused to consider the issues in letters dated 23 and 28 February 2001 (iii) the costs assessor and the solicitors refused to give access to files prior to the costs assessor issuing the certificate of determination (iv) the costs review panel had not examined or considered all of the material submitted which was confirmed by the statement made by the costs review panel that "no relevant lack of care on the part of GHB has been shown to exist" (v) the costs review panel failed to give any, or any proper reasons for the decision as to why they agreed with the reasoning of the costs assessor (vi) the costs review panel failed to give reasons or any proper reasons for their decision.

6 The second ground of the appeal is that the costs review panel failed to comply with s 208A of the Act in that: (i) the costs assessor and the costs review panel failed to account for the fact that the plaintiff prepared his own affidavit, then sent the disc to GHB. GHB charged $6,545.00 for the preparation of the affidavit.

7 The third and fourth grounds are that the costs review panel failed to comply with s 208B(e) and (f) of the Act. The fifth ground of appeal is that the costs review panel erred in finding that it was not appropriate to determine contested, complex and wide ranging commercial negligence issues inherent in many of the allegations made. The sixth ground of the appeal is that the costs review panel erred in applying Cachia v Isaacs & Ors (1985) 3 NSWLR 366 at 371.

8 By way of background, GHB acted for the plaintiff in relation to proceedings commenced by ANZ Banking Group Ltd against the plaintiff in this court. The bank claimed the sum of $118,414.24 plus interest being for monies outstanding to the bank pursuant to a guarantee dated 19 November 1987. The plaintiff and GHB entered into a fee arrangement on 1 July 1995. During the period 24 April 1996 to 24 September 1999, GHB rendered itemised bills to the plaintiff in the sum of $48,789.98.

9 On 2 December 1999, GHB filed an application for assessment of practitioner/client costs in the Supreme Court of New South Wales. On 20 July 2000, the costs assessor issued a certificate as to determination of costs. The costs assessor allowed GHB the sum of $42,389.52 less an amount of $20,762.50 previously paid on account. On 22 June 2001 the costs review panel affirmed the costs assessor’s determination. The costs assessor’s determination was registered as a judgment of the Downing Centre Local Court on 20 July 2000.

Reasons of Tribunal

10 The plaintiff submitted that the review panel failed to comply with s 208KG(1)(a) of the Act in that it did not give sufficient reasons for its determination. The plaintiff further submitted that the costs review panel’s decision dated 22 June 2001 falls short of complying with this requirement because there are assertions of fact that are not backed up with reasons for those statements and there was no independent thinking by the tribunal in reaching its decision.

11 The defendants submit that the panel dealt with the plaintiff’s submissions under the heads quoted above. They submit that where the panel allegedly fails to provide reasons for its determination, the panel affirms the reasoning of the costs assessor. The reasons of the costs assessor are proper reasons for the purposes of section 208JAA of the Act and section 61 of the Legal Profession Regulation 2002.

12 Section 208KG of the Act provides:

“Reasons for determination

(1) The panel must ensure that a certificate issued under section 208KF that sets out the determination of the panel is accompanied by:


(a) a statement of the reasons for the panel’s determination, and

(b) such supplementary information, in relation to the determination, as may be required by the regulations.

(2) The statement of reasons must be given in accordance with the regulations.”

13 The regulations in force at the relevant time were Regulations 26IJ(2) and (3) of the Legal Profession Regulation 1994. They state:

“(2) A statement of reasons to which this clause applies must contain the following:
(a) the total amount of costs for providing legal services determined to be fair and reasonable,
(b) the total amount of disbursements determined to be fair and reasonable,
(c) each disbursement varied by the determination,
(d) in respect of any disputed costs, explanation of:
(i) the basis on which the costs were assessed, and
(ii) how the submissions made by the parties were dealt with.
(3) A statement of reasons to which this clause applies may set out such further information as the costs assessor or costs review panel concerned considers is necessary to clarify the determination of the application for a costs assessment or the review of a costs assessor’s determination.”

14 On 20 February 2001 the defendants’ solicitor wrote to the panel members and identified the source of difficulty which permeated throughout the costs assessment process and the review. The difficulty was that the plaintiff did not address his objections to specific items in the bill of costs but rather made general and sometimes wide ranging assertions. Thus it is difficult for the costs assessor and the review panel to identify and comment on each item in dispute in the notice of objections. The review panel in their reasons identified the voluminous material that they were called upon to consider. I need not reproduce them here. The panel identified the areas of the bill that the plaintiff sought to review by topic. The panel did not vary any item covered in the costs assessor’s decision.

15 It is my view that the review panel complied with s 208KG of the Act and there is no error of law.

Denial of Natural Justice

16 The plaintiff complains that he was denied natural justice before the costs assessor due principally to the failure of the defendant to produce its files and any time sheets, despite requests by the costs assessor, until the day before the costs assessor issued his certificate of determination. The plaintiff was not given the opportunity to make submissions to the costs assessor, nor does the plaintiff believe the cost assessor could have made a proper examination of the timesheets prior to the determination being made. The defendants deny that they failed to produce any time sheets to the Cost Assessor and further say that even if the plaintiff were correct in his submission, for the purposes of the review undertaken by the Panel, the plaintiff had unrestricted access to the files relating to the subject matter for the purpose of preparing submissions. Further, the defendants submitted that the Panel had access to the time sheets. Under the paragraph headed "Non-inspection of time records by Costs Assessor" in the Panel's reasons for determination it stated:

"This aspect has been fully explored in a letter dated 3 October 2000 from the Costs Assessor to the Proper Officer. It is quite clear that the time records were before the Costs Assessor, and considered by him, prior to his making the determination.

His letter to the parties enclosing the Certificate was in fact typed and sent on 20 July 2000 (the date of the Certificate) although it contained the date (14 July) of a previous draft thereof, which inadvertently had not been up-dated.

While that unfortunately misled CRP, it did not in fact relate to a failure on the part of the Costs Assessor to inspect as claimed. "

17 The costs assessor considered the timesheets and relevant documents. There has been no denial of natural justice.

Failure of the Costs Review Panel to comply with sections 208A and section 208B(e) & (f)

18 The plaintiff submitted that the costs assessor and the costs review panel are obliged to consider the matters in ss 208A and 208B.

19 Section 208A of the Act states:

“Assessment of bills generally

(1) When considering an application relating to a bill of costs, the costs assessor must consider:


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

(b) whether or not the work was carried out in a reasonable manner, and

(c) the fairness and reasonableness of the amount of the costs in relation to that work.


(2) A costs assessor is to determine the application by confirming the bill of costs or, if the assessor is satisfied that the disputed costs are unfair or unreasonable, by substituting for the amount of the costs an amount that, in his or her opinion, is a fair and reasonable amount.

(3) Any amount substituted for the amount of the costs may include an allowance for any fee paid or payable for the application by the applicant.

(4) If the barrister or solicitor is liable under section 182 (3) to pay the costs of the costs assessment (including the costs of the costs assessor), the costs assessor is to determine the amount of those costs. The costs incurred by the client are to be deducted from the amount payable under the bill of costs and the costs of the costs assessor are to be paid to the Manager, Costs Assessment.

(5) A costs assessor may not determine that any part of a bill of costs that is not the subject of an application is unfair or unreasonable.”

20 Section 208B (e) & (f) of the Act provide:

“Additional matters to be considered by costs assessors in assessing bills of costs

In assessing what is a fair and reasonable amount of costs, a costs assessor may have regard to any or all of the following matters:

....

(e) the skill, labour and responsibility displayed on the part of the barrister or solicitor responsible for the matter,

(f) the instructions and whether the work done was within the scope of the instructions...”

21 In particular the plaintiff submitted that the costs assessor and the panel failed to account for the fact that the plaintiff prepared his own affidavit and then sent that by disk to the defendants, who charged $6,545.00 for the work. This dispute is a factual one and not subject to appeal.

22 The plaintiff has not sought to bring a claim of negligence but rather he has submitted that a client is not liable to pay a solicitor for negligent work or work with no value - see Cachia v Isaacs & Ors (1985) 3 NSWLR 366 Kirby P at 371. The plaintiff says that in giving the advice, the solicitor misunderstood a fundamental proposition and refused to act on repeated instructions. The source of the plaintiff’s complaint is that the second mortgage is deficient because the nominated customer Pierson & Company does not exist. The correct entity was Pierson & Co Pty Ltd. On 3 September 1998 the solicitor gave Mr Pierson detailed advice on this issue. This advice appears to be correct.

23 On this topic, the review panel stated that they did not believe that anything raised by the costs review panel was sufficient to establish negligence on the part of GHB or to disentitle the review respondents to the costs as allowed by the costs assessor, or any part of those costs.

24 It is my view that the panel did not make an error of law. The appeal is dismissed. The decision of the review panel is affirmed. The amended summons is dismissed.

25 Costs are discretionary. Costs follow the event. The plaintiff is to pay the defendant’s costs as agreed or assessed.

26 The court orders:

(1) The appeal is dismissed.

(2) The decision of the review panel dated 22 June 2001 is affirmed.

(3) The amended summons filed 1 July 2003 is dismissed.

(4) The plaintiff is to pay the defendant’s costs as agreed or assessed.
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Last Modified: 02/27/2004