Radich v Smith
[2012] QMC 17
•13 July 2012
MAGISTRATES COURTS OF QUEENSLAND
CITATION: | Radich v Smith & Anor [2012] QMC 17 |
PARTIES: | NICHOLAS CHARLES LUKE RADICH (plaintiff/applicant) v BRIAN LEIGH SMITH (first defendant) And GILIAN ROASLIND KENWAY (second defendant) |
FILE NO/S: | M2322/10 |
DIVISION: | Magistrates Courts |
PROCEEDING: | Application to review and set aside costs assessment. |
ORIGINATING COURT: | Magistrates Court at Southport. |
DELIVERED ON: | 13 July 2012 |
DELIVERED AT: | Southport |
HEARING DATE: | 18 January 2012 with written submissions received on 2 February 2012, 17 February 2012, 6 March 2012 (Further unsolicited submissions received on 9 March and 14 March 2012, made without seeking leave of the court, were ignored). |
MAGISTRATE: | Costanzo JJ |
ORDERS: | 1. Pursuant to Rule 742(6)(e) of the Uniform Civil Procedure Rules 1999, the decisions of the costs assessor, contained in the certificate of assessment dated 2 September 2011, are affirmed. 2. If the parties are unable, by 5 pm on Friday 27 July 2012, to reach agreement about the costs of this review, then any party may apply to be heard by filing and serving an application and upon giving at least 10 business days notice of a date for hearing the application. Three business days before the hearing date the parties are to each file and serve a brief written outline of their respective submissions, each being no more than 3 pages in length. |
CATCHWORDS: | LEGAL PRACTITIONERS – COSTS – costs assessment - whether costs assessor observed procedural fairness - whether the amount claimed is fair and reasonable in the circumstances. Uniform Civil Procedure Rules 1999, r 742 Legal Profession Act 2007, s 341 Cases referred to in judgment or in submissions: Attorney-General of New South Wales v Kennedy Miller Television Pty Ltd [1999] NSWCA 158. Australian Coal & Shale Employees' Federation v Commonwealth (1953) 94 CLR 621; (1953) 30 ALJR 311; [1953] HCA 25. Bain Gasteen & Co's Bill of Costs, Re [1990] 1 Qd R 412; [1991] ANZ ConvR 25; (1990) Q ConvR 54-366. Bottoms v Reser [2000] QSC 413. ChongHerr Investments Ltd v Titan Sandstone Pty Ltd [2007] QCA 278. Cosmetic Surgery Advisory Centre (of Australia) P/L v Hawthorn Cuppaidge & Badgery [2011] QMC 33. Franklin v Barry & Nilsson Lawyers (No 2) [2011] QDC 55. Gold Coast Bakeries (Qld) Pty Ltd v Heat & Control Pty Ltd [1992] 1 Qd R126; (1990) 6 ANZ Ins Cas 61-036. Hannover International Ltd v C W Robson; Mine & Quarry Equipment International v C W Robson; G F Robson v C W Robson & Anor [2012] QSC 47. Herijanto v Refugee Review Tribunal (2000) 170 ALR 379; (2000) 74 ALJR 698; (2000) 21(7) Leg Rep 33; [2000] HCA 16. Hook v Boreham & QBE Insurance (Australia) Limited [2006] QDC 304. McCoombes v Curragh Queensland Mining Limited [2001] QDC 142. Nashvying Pty Ltd & Ors v Giacomi [2009] QSC 31. News Ltd v Australian Rugby Football League Ltd (Super League case) (1996) 64 FCR 410; (1996) 139 ALR 193; (1996) 21 ACSR 635; (1996) 35 IPR 446; (1996) ATPR 41-521. Precision Plastics Pty Ltd v Demir (1975) 132 CLR 362; (1975) 6 ALR 311; (1975) 49 ALJR 281. Re: Blyth and Fanshawe (1882) 10 QBD 207. Rota v Tukiri [2001] 1 NZLR 715. Saint v Holmes (2008) 170 FCR 262; (2008) 104 ALD 556; [2008] FCA 987. Southwell v Jackson [2012] QDC 65. State of Victoria v Sutton (1998) 195 CLR 291; (1998) 156 ALR 579; (1998) 72 ALJR 1386; [1998] 15 Leg Rep 2; (1998) 83 IR 1; [1998] HCA 56. Stubberfield v Lippiatt & Co [2003] QDC 034. Tasty Chicks Pty Ltd v Chief Commissioner of State Revenue (2011) 125 ALD 1; (2011) 281 ALR 687; (2011) 85 ALJR 1183; (2011) 80 ATR 251; [2011] HCA 41. Wentworth v Wentworth; Estate of Wentworth [1999] NSWSC 317. Wentworth v Wentworth & Ors [2000] NSWCA 350. Wentworth v Wentworth (2001) 52 NSWLR 602; [2000] NSWCA 350. Zanatta v McCleary [1976] 1 NSWLR 230. |
COUNSEL: | AC Barlow for the plaintiff/applicant. |
SOLICITORS: | N Radich for the plaintiff/applicant. PJ Ponting for the defendants. |
The Application
This is an application to set aside the Certificate of a Costs Assessor, Mr Glen Walter, dated 24 March 2011, including the Costs Assessor’s decision to charge the Applicant $7892.50 for the Costs Assessor’s Reasons for Decision dated 2 September 2011[1].
[1] Rule 738 UCPR provides:
The applicant’s primary position is that if the assessment is set aside I should appoint a new Costs Assessor[2]. Alternatively, it was submitted, I should review all the decisions of the Costs Assessor.
[2] Submissions on behalf of the Applicant dated 2 February 2012 at para [4].
The application to set aside the assessment is made under Rule 742 of the Uniform Civil Procedure Rules 1999 (UCPR).
The Applicant submits I am given jurisdiction to review the decisions by rule 738 (see footnote 1) and rule 742 of the UCPR.
Rule 742 UCPR[3] provides:
[3] Rule 742 appears in the Uniform Civil Procedure Rules 1999, Chapter 17A (Costs), Part 3 (Assessment of costs other than under the Legal Profession Act 2007), Division 6 (After assessment). However, under UCPR Rule 743I (Application of other rules) rule 742 also applies to costs assessed under the Legal Profession Act 2007.
742 Review by court
(1) A party dissatisfied with a decision included in a costs assessor’s certificate of assessment may apply to the court to review the decision.
(2) An application for review must be filed within—
(a) if reasons are requested under rule 738(1)—14 days after the party receives those reasons; or
(b) otherwise—14 days after the party receives the certificate.
(3) The application must—
(a) state specific and concise grounds for objecting to the certificate; and
(b) have attached to it a copy of any written reasons for the decision given by the costs assessor; and
(c) state any other matter required by a practice direction made in relation to this rule.
(4) The applicant must serve a copy of the application on all other parties to the assessment within 14 days after the application is filed.
(5) On a review, unless the court directs otherwise—
(a) the court may not receive further evidence; and
(b) a party may not raise any ground of objection not stated in the application for assessment or a notice of objection or raised before the costs assessor.
(6) Subject to subrule (5), on the review, the court may do any of the following—
(a) exercise all the powers of the costs assessor in relation to the assessment;
(b) set aside or vary the decision of the costs assessor;
(c) set aside or vary an order made under rule 740(1);
(d) refer any item to the costs assessor for reconsideration, with or without directions;
(e) make any other order or give any other direction the court considers appropriate.
(7) Unless the court orders otherwise, the application for review does not operate as a stay of the registrar’s order. (my underlining).The Review Process
The nature and scope of a review depends upon its context and on the terms of the legislation providing for the review. See Tasty Chicks Pty Ltd v Chief Commissioner of State Revenue (2011) 85 ALJR 1183 at [5].
In Australian Coal & Shale Employees' Federation v Commonwealth[4] (1953) 94 CLR 621; [1953] HCA 25, at [11] Kitto J dealt with the attitude which an appellate court ought to adopt to decisions of a taxing officer:
“I take it to be true that the decision of the taxing officer as to quantum is generally speaking final, and that it must be a very exceptional case in which the Court will even listen to an application to review such a decision … . I respectfully adopt the summary of the law on this matter which was made by Jordan C.J., with the concurrence of Harvey C.J. in Eq. and Street J., in Schweppes' Ltd. v. Archer (1934) 34 SR (NSW) 178; 51 WN 71. His Honour said: - "In appeals as to costs, the principles to be applied are these. The Court will always review a decision of a Taxing Officer where it is contended that he has proceeded upon a wrong principle, for the purpose of determining the principle which should be applied; and an error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed. Where no principle is involved, and the question is, whether the Taxing Officer has correctly exercised a discretion which he possesses and is purporting to exercise, the Court is reluctant to interfere. It has undoubted jurisdiction to review the Taxing Officer's decision even where an exercise of discretion only is involved, and will do so freely on a proper case, using its own knowledge of the circumstances: Western Australian Bank v.Royal Insurance Co. (1908) 7 CLR, at p 388; Clark, Tait & Co. v. Federal Commissioner of Taxation [1931] HCA 26; (1931) 47 CLR 142, at pp 145-146, but it will in general interfere only where the discretion appears not to have been exercised at all, or to have been exercised in a manner which is manifestly wrong; and where the question is one of amount only, will do so only in an extreme case" (1934) 34 SR (NSW), at pp 183, 184; 51 WN, at p 73.” (my underlining)
[4] Recently followed and applied by Irwin DCJ in Franklin v Barry & Nilsson Lawyers (No 2) [2011] QDC 55 at [46].
In Nashvying Pty Ltd v Giacomi [2009] QSC 031, Jones J, after referring to rule 742(6) UCPR, held at [4], following Australian Coal and Shale Employees Federation v The Commonwealth(above), that:
“The discretion conferred by the sub-rule is a wide one. But it is to be exercised with a consciousness that it is effectively an appeal against the exercise by the cost assessor of a discretion. In general, the Court will interfere only where the discretion appears not to have been exercised at all or to have been exercised in a manner which is manifestly wrong.” (my underlining)
In Hannover International Ltd v C W Robson; Mine & Quarry Equipment International v C W Robson; G F Robson v C W Robson & Anor [2012] QSC 47 her Honour A Lyons J held at [12] that
“there is no doubt that a costs assessor appointed pursuant to the UCPR has a very broad discretion and the Court, on review of such an assessment, has a similarly wide discretion.” At [18] her Honour held that: “An applicant must … show that the discretion has not been exercised at all or that it was exercised in a manner which was clearly wrong.” (my underlining)
The Material
The following material, which I have read and had regard to, was read on behalf of the Applicant:
(i)The costs assessment and Costs Assessor’s Certificate dated 24 March 2011.
(ii)The Costs Assessor’s Reasons dated 2 September 2011.
(iii)Affidavit of Nicholas Charles Luke Radich sworn on 15 September 2010.
(iv)Affidavit of Nicholas Charles Luke Radich sworn on 15 December 2011.
(v)Affidavit of Robyn Anne Nichols Davis sworn on 11 November 2011.
(vi)Affidavit of Robyn Anne Nichols Davis sworn on 18 January 2012.
(vii)The amended application, amended by order of Magistrate Duroux on 7 December 2011, together with the further amendments allowed by me at the commencement of the hearing on 18 January 2012.
The following material, which I have read and had regard to, was read on behalf of the Defendants:
(i)Claim and Statement of Claim filed on 2 August 2010,
(ii)Notice of Intention to Defend and Defence file 2 September 2010,
(iii)Affidavit of Brian Leigh Smith sworn 3 September 2010, filed 3 September 2010
(iv)Affidavit of Xara Coassin sworn 3 September 2010, File 3 September 2010
(v)Order dated 4 October 2010,
(vi)Certificate of Costs Assessor dated 24 March 2011,
(vii)Reasons of the Costs Assessor dated 2 September 2011,
(viii)Application filed 24 September 2011,
(ix)Affidavit of Bernard Francis Ponting sworn 2 December 2011,
(x)Affidavit of Nicholas Charles Luke Radich sworn 15 December 2011.
Grounds
The Applicant stated 20 grounds for objecting to the certificate. The grounds (as amended) for objecting to the certificate were as follows:
a. The costs Assessor erred by failing to ensure the procedure for the assessment complied with rules 720, 706 and 722 UCPR, and s 341 of the Legal Professional Act 2007 (the Act), namely, that the assessment was:
iAppropriate to the scope, nature and amount in dispute;
iiConsistent with the rules of natural justice; and
iiiFair and efficient;
ivPerformed with regard to rule 706, which rule required the objections to be in Form 61, UCPR; and
vPerformed with regard to rule 722 UCPR, which rule required the assessor to limit the assessment to the particular issue or item raised in the notice of objection;
viPerformed with regard to, or alternatively, with little regard to s.341 of the Act, which section requires the assessor to allow “fair and reasonable” costs, having regards to the fact that the Plaintiff is a sole practitioner.
b. The Costs Assessor erred by conducting an assessment of costs, in respect of disputed costs in the sum of approximately $20,000 (the “disputed costs”) which assessment resulted in the following assessment costs being incurred:
iThe assessor’s costs in the sum of $5,246.33;
iiThe assessor’s costs for providing reasons, in the sum of $7,892.50; and
iiiThe Defendants’ costs in the sum of $8,905.61;
c. The Costs Assessor erred, by disallowing or reducing, against the evidence or the weight of evidence, and without regard to Rules 706 and 722 UCPR, and s 341 of the Act, the items in the Plaintiff’s invoice 100615/1, which items are referred to in paragraphs [105] to [166] of the reasons;
d. The Costs Assessor erred, by reducing, against the evidence or the weight of evidence, and without regard to Rules 706 and 722 UCPR, and s 341 of the Act, the sum allowed to the Plaintiff, pursuant to invoice 100615/1, by $8,702.63;
e. Additionally, and in the alternative, the Costs Assessors reduction of the Plaintiff’s invoice 100615/1 by $8,702.63 is excessive, having regard to the requirements of s 341 of the Act;
f. The Costs Assessor erred, by disallowing or reducing, against the evidence or the weight of evidence, and without regard to Rules 706 and 722 UCPR, and s 341 of the Act, the items in the Plaintiff’s invoice 100615/2, which items are referred to in paragraphs [197] to [202] of the reasons;
g. The Costs Assessor erred, by reducing, against the evidence or the weight of evidence and without regard to Rules 706 and 722 UCPR, and s 341 of the Act, the sum allowed to the Plaintiff, pursuant to invoice 100615/2 by $423.59;
h. Additionally, and in the alternative, the Costs Assessors reduction of the Plaintiff’s invoice 100615/2 by $423.59 is excessive, having regard to the requirements of s 341 of the Act;
i. The Costs Assessor erred by assessing, as his fee for the assessment, the sum of $5,246.33, in the circumstances of the disputed sum, and by failing to have regard the reasonable costs of an assessment of this type, as evidenced by exhibit “RND 5” to the affidavit of Robyn Davis;
j. The Costs Assessor erred, when assessing his fee for the assessment, in the sum of $5,246.33, by failing to have regard to rule 706 UCPR and alternatively, a typical District Court matter, the costs of assessment of which are typically in the order of $1,600 to $2,000;
k. The Costs Assessor erred, when assessing his fee for the assessment in the sum of $5,246.33 by failing to have regard to the amount in dispute, and the scope and nature of the dispute, as required by rule 749 UCPR;
l. The Costs Assessor erred by allowing, as his fee of the assessment, the sum of $5,246.22, instead of the sum of $1,705.00, that being a reasonable fee for the assessment.
m. The Costs assessor erred, when assessing the Defendants’ costs of the assessment in the sum of $8,905.61 by failing to have regard to, or adequate regard to, the requirements of rule 720 UCPR;
n. The Costs Assessor erred, when assessing the Defendants’ costs of the assessment in the sum of $8,905.61 by failing to have regard to, or adequate regard to, the scale of costs for this Court;
o. The Costs Assessor erred, when assessing the Defendants’ costs of the assessment in the sum of $8905.61 by allowing that sum, as an indemnity, there being no basis for such an allowance;
p. The Costs Assessor erred, when requiring the Plaintiff to pay the Defendants’ costs of the assessment, on an indemnity basis, or at all, there being no basis for such a requirement pursuant to s 342 of the Act, or at all;
q. The Costs Assessor erred, when providing reasons for the assessment that required 59 A4 pages of single spaced text, by failing to have regard to, or adequate regard to, rule 720 UCPR;
r. The Costs Assessor erred when providing reasons for the assessment that increased the costs of the assessment by $7,892.50, by failing to have regards to, or adequate regard to, rule 720 UCPR and the reasonable costs of providing reasons, in a matter such as this, that being $1,500;
s. The Costs Assessor erred when assessing the costs of providing reasons for the assessment in the sum of $7,892.50, by failing to have regard to, or adequate regard to, rule 720 UCPR; and
t. The Costs Assessor erred when requiring the Plaintiff to pay the costs of providing reasons for the assessment, on an indemnity basis, there being no basis for such an allowance, have regard to, or adequate regard to, rule 720 UCPR and the reasonable costs of providing reasons, in a matter such as this, that being $1,500.
In the written submissions the applicant did not address each of the grounds in any meaningful, let alone numerical, order. He preferred instead to concentrate on trying to read rules 706 and 722 from part 3 of the UCPR into part 4 of the UCPR despite the fact rule 743I is the only rule under which other rules are read into part 4 for assessments made under the Act. The applicant’s submission concentrates on three issues. Those three broad grounds (which at least can be gleaned from the 20 grounds) are:
A. That the applicant was denied natural justice by the costs assessor assessing and disallowing certain items which had not been objected to by the Defendants.
B. That the costs of the assessment must be wrong because they exceeded the costs being assessed.
C. That the costs assessor assessed the Defendant’s costs on an indemnity basis without authority under the UCPR or the Act to do so.
The Defendants on the other hand have addressed these three issues and the 20 grounds in a helpful way in their written submission.
Clearly there are significant overlaps between most of the 20 grounds.
Before I consider those three main issues it is convenient to examine the relevant provisions which the applicant submits the costs assessor failed to comply with.
Alleged failure to comply with Rules 706, 720 and 722 of the UCPR and section 341 of the Legal Profession Act 2007.
Rules 706, 720 and 722 of the UCPR appear in Part 3 (Assessment of costs other than under the Legal Profession Act 2007.
Part 3 of the UCPR does not apply to costs payable or to be assessed under the Legal Profession Act 2007.
According to UCPR Rule 678(2), chapter 17A (Costs):
(a) part 2 applies only, where there is no costs agreement made under division 5, to costs payable or to be assessed under the Legal Profession Act 2007 and under the applicable scale of costs; and
(b) part 3 does not apply to costs payable or to be assessed under the Legal Profession Act 2007; and
(c) part 4 applies only to costs payable or to be assessed under the Legal Profession Act 2007.
Rule 706 UCPR provides:
706 Objection to costs statement
(1) A party on whom a costs statement is served may, within 21 days after being served, object to any item in the statement by serving a notice of objection on the party serving the statement.
(2) The notice of objection must—(a) number each objection; and
(b) give the number of each item in the costs statement to which the party objects; and
(c) for each objection—concisely state the reasons for the objection identifying any issue of law or fact the objector contends a costs assessor should consider in order to make a decision in favour of the objector.(3) The reasons for objection may be in abbreviated note form but must be understandable without further explanation.
(4) If the same objection applies to consecutive or nearly consecutive items in a costs statement, the notice need not separately state the reasons for objecting to each of the items.
(5) Also, if there are a number of associated items, the objection may be in the form of an objection to a common issue related to the associated items.
In UCPR ch 17A (Costs) Part 3 (Assessment of costs other than under the Legal Profession Act 2007), Rules 720 to 722 provide:
720 Procedure on assessment
(1) A costs assessor appointed to carry out a costs assessment is to decide the procedure to be followed on the assessment.
(2) However, the procedure must be—(a) appropriate to the scope and nature of the dispute and the amount in dispute; and
(b) consistent with the rules of natural justice; and
(c) fair and efficient.(3) Also, if the costs are payable out of a fund—
(a) the applicant must serve on the person having charge of the fund a notice—
(i) identifying the fund; and
(ii) stating that the costs in the costs statement to be assessed are payable out of the fund; and
(iii) stating when the costs are to be assessed; and
(iv) containing or attaching any other information the costs assessor requires to be included in or with the notice; and(b) the person having charge of the fund may make submissions to the costs assessor in relation to the assessment.
(4) Without limiting subrule (1) or (2), the costs assessor may decide to do all or any of the following—
(a) hear the costs assessment in private;
(b) carry out the costs assessment on the papers without an oral hearing;
(c) not be bound by laws of evidence or procedure applying to a proceeding in the court;
(d) be informed of the facts in any way the costs assessor considers appropriate;(e) not make a record of the evidence given.
721 Discretion of a costs assessor
In assessing costs, a costs assessor must consider the following—(a) any other fees and allowances payable to the solicitor or counsel for other items in the same proceeding;
(b) the nature and importance of the proceeding;
(c) the amount involved;
(d) the principle involved;
(e) the interests of the parties;
(f) the person who is to pay the costs, or the fund or estate out of which the costs are to be paid;
(g) the general conduct and cost of the proceeding;
(h) any other relevant circumstances.722 Assessment must be limited
If a notice of objection relates only to a particular issue or a particular item, a costs assessor must limit the assessment to the resolution of the matters raised in the notice of objection in relation to the issue or item and otherwise assess the costs under rule 708.Rule 708 UCPR provides:
708 Default assessment if no objection to costs statement
(1) This rule applies if—(a) a party served with a costs statement does not serve a notice of objection under rule 706; and
(b) the party who served the costs statement files an application for a costs assessment under rule 710.(2) On the filing of the application, the registrar must appoint a costs assessor to assess costs under this rule.
(3) The costs assessor must, on proof that the costs statement was served on the party liable for the costs—(a) assess the costs without considering each item and by allowing the costs claimed in the costs statement; and
(b) issue a certificate of assessment.(4) However—
(a) despite subrule (3)(a), the costs of attending the assessment of costs are not allowable; and
(b) subrule (3)(a) does not prevent the costs assessor correcting an obvious error in the costs statement.(5) Rules 711, 712 and 721 do not apply to an assessment of costs under this rule.
Section 341 of the Act cannot be considered in isolation. Sections 340 to 342 relevantly provide:
340 Assessment of complying costs agreements
(1) A costs assessor for a costs application must assess any disputed costs that are subject to a costs agreement by reference to the provisions of the costs agreement if—(a) a relevant provision of the costs agreement specifies the amount, or a rate or other means for calculating the amount, of the costs; and
(b) the agreement has not been set aside under section 328;unless the costs assessor is satisfied that—
(c) the costs agreement does not comply in a material respect with any disclosure requirements of division 3; or
(d) division 5 precludes the law practice concerned from recovering the amount of the costs; or(e) the parties otherwise agree.
(2) The costs assessor is not required to initiate an examination of the matters mentioned in subsection (1)(c) and (d).
341 Criteria for assessment
(1) In conducting a costs assessment, the costs assessor must consider—(a) whether or not it was reasonable to carry out the work to which the legal costs relate; and
(b) whether or not the work was carried out in a reasonable way; and
(c) the fairness and reasonableness of the amount of legal costs in relation to the work, except to the extent that section 340 applies to any disputed costs.(2) In considering what is a fair and reasonable amount of legal costs, the costs assessor may have regard to any or all of the following matters—
(a) whether the law practice and any Australian legal practitioner or Australian-registered foreign lawyer acting on its behalf complied with this Act;
(b) any disclosures made by the law practice under division;
(c) any relevant advertisement as to—(i) the law practice’s costs; or
(ii) the skills of the law practice, or of any Australian legal practitioner or Australian-registered foreign lawyer acting on its behalf;(d) the skill, labour and responsibility displayed on the part of the Australian legal practitioner or Australian-registered foreign lawyer responsible for the matter;
(e) the retainer and whether the work done was within the scope of the retainer;
(f) the complexity, novelty or difficulty of the matter;
(g) the quality of the work done;
(h) the place where, and circumstances in which, the legal services were provided;
(i) the time within which the work was required to be done;
(j) any other relevant matter.(3) In conducting an assessment of legal costs payable by a non-associated third party payer, the costs assessor must also consider whether it is fair and reasonable in the circumstances for the non-associated third party payer to be charged the amount claimed.
342 Costs of assessment
(1) A costs assessor must decide the costs of a costs assessment.
(2) Unless the costs assessor otherwise orders, the law practice to which the legal costs are payable or were paid must pay the costs of the costs assessment if—(a) on the assessment, the legal costs are reduced by 15% or more; or
(b) the costs assessor is satisfied the law practice failed to comply with division 3.(3) Unless the costs assessor otherwise orders if, under subsection (2), the law practice is not liable to pay the costs of the costs assessment, the costs of the assessment must be paid by the party ordered by the costs assessor to pay those costs.
These provisions appear in Chapter 3 (Conduct of legal practice) Part 3.4 (Costs disclosure and assessment) of the Act.
Background
In 2010 the Defendants engaged the applicant, a solicitor, to act for them in relation to a prosecution of them by the Gold Coast City Council and subsequently in relation to an appeal to the District Court. On 15 June 2010 the applicant solicitor raised two invoices. One, referred to as “the longer bill”, was tax invoice number 100615/1, which referred to the District Court appeal. The other “shorter bill” referred to the District Court proceeding.
By 4 October 2010 the Deputy Registrar made a consent order under section 335 of the Act that the costs in the two bills be assessed and that Mr Walter be appointed as the assessor. On 19 October 2010 the assessor issued directions for the conduct of his assessment. The assessor’s certificate was filed on 25 March 2011. The Applicant solicitor then requested written reasons which followed on 2 September 2011. On 19 September 2011 this application was filed.
The assessment was under the Act
Section 335 of the Act, so far as it is relevant to this review, merely provides that a client may apply, under subsection (1), for an assessment of the whole or any part of legal costs, and that the application under subsection (1) must be made in the way provided under the UCPR.
Under section 300 of the Act, for Part 3.4 of the Act (Costs disclosure and assessments), a costs assessor means a person appointed under the UCPR as a Costs Assessor. However, a costs assessment means an assessment of legal costs under division 7 (Cost assessment) of part 3.4 of the Act. There is no provision in the UCPR for the assessment to be undertaken, for example, in accordance with any criteria set out in the UCPR. Instead, in Division 7, sections 340 and 341 of the Act set out the criteria for an assessment of costs by reference to the complying costs agreement. The only exceptions (to having reference to relevant provisions of the costs agreement) are if the costs assessor is satisfied that the costs agreement does not comply in a material respect with any disclosure requirements of division 3 or if division 5 precludes the law practice concerned from recovering the amount of the costs or if the parties otherwise agree. Section 340(2) provides that the costs assessor is not required to initiate an examination of the matters mentioned in the first two of these exceptions. However, even then the criteria for the assessment are set out in section 341 and do not cross-reference or apply the criteria in the UCPR.
Under UCPR Rule 678(2) part 4 of the UCPR does apply to costs payable or to be assessed under the Legal Profession Act 2007.
However, Rule 743I UCPR (Application of other rules) provides that a number of rules which appear in Part 3 also apply to costs assessed under the Legal Profession Act 2007. These are:
• rule 715 (Powers of a costs assessor)
• rule 716 (No participation by a party)
• rule 717 (Issue or question arising)
• rule 718 (Notice of adjournment)
• rule 719 (Conflict of interest)
• rule 720 (Procedure on assessment)
• rule 732 (Costs of assessment)
• rule 737 (Certificate of assessment)
• rule 738 (Written reasons for decision) and
• rule 742 (Review by court).Of note, rule 722, which limits an assessment to particular issues and items raised in a notice of objection, was not incorporated under rule 743I. Nor was rule 706.
Also of note, rule 721 was not incorporated into Part 3. Rule 721 provided for a number of matters which a costs assessor must consider:
721 Discretion of a costs assessor
In assessing costs, a costs assessor must consider the following—
(a) any other fees and allowances payable to the solicitor or counsel for other items in the same proceeding;
(b) the nature and importance of the proceeding;
(c) the amount involved;
(d) the principle involved;
(e) the interests of the parties;
(f) the person who is to pay the costs, or the fund or estate out of which the costs are to be paid;
(g) the general conduct and cost of the proceeding;
(h) any other relevant circumstances.
In any case, rule 720 does have application. Therefore, the costs assessor had to adopt a procedure that was —
(a) appropriate to the scope and nature of the dispute and the amount in dispute; and
(b) consistent with the rules of natural justice; and
(c) fair and efficient.Conduct of the parties
I also need to address the conduct of these proceedings by the lawyers.
I have already commented on the state of the written submissions.
I note that each party was represented by experienced lawyers. At the end of the hearing of this application I reserved my decision and required written submissions. I gave directions that the Applicant was to file and serve his submissions by 5 pm on 3 February 2012, the Defendants were to file and serve the submissions in response by 5 pm on 17 February 2012 and the Applicant could file and serve any reply on a point of law by 5 pm on 29 February 2012. Each party complied with the first two directions. The applicant sought by letter[5] an extension of time until 6 March 2012 to comply with third direction regarding a reply on a point of law. I granted the short extension. The submission in reply was then received on 6 March 2012.
[5] The letter is dated 28 February 2012 and has been files with the papers.
However, on 9 March 2012 I received an unsolicited document headed “Defendant’s further submissions” from “Bernard Ponting & Co, Solicitors for the defendants”. The defendant’s did not seek leave to make this further submission. Given that this document was sent by the party defending a claim by the applicant that the applicant had been denied procedural fairness by the Costs Assessor I found this step to be quite intriguing. Not to be outdone, the applicant then felt it necessary to deliver to the court, also without seeking leave, a further document headed “Applicant’s response to the document entitled ‘Defendant’s further submissions’ ”.[6] The applicant at least predicated his further submissions on the possibility that the defendants may have sought, and may have been granted, leave. However, the defendants did not seek leave. Obviously, therefore, leave has not been granted.
[6] These two submissions have been filed with the papers.
Consequently, and for reasons outlined below, I have ignored each of the unsolicited submissions referred to in the preceding paragraph.
It is also worth noting and remarking at this juncture that the applicant, who complains that he was denied natural justice by the costs assessor in the proceeding before me has relied, for evidence of an expert witness, on one witness who has a clear potential, if not actual, conflict of interest. Ms Robyn Ann Nichol Davis stated at paragraph 2 of her affidavit (filed on 14 November 2011) that she has “particular knowledge of the matter given I reviewed the files of the Plaintiff, prepared the initial cost statements and assisted with responses to objections and enquiries during the process”. However, Ms Davis was not involved with the preparation of objections to the defendant solicitor’s cost statements.
Therefore, Ms Davis prepared the very bills assessed by the costs assessor and then gave expert evidence critical of the way the assessor has assessed those bills. Any independant observer knowing the facts of this case would clearly conclude that the witness can be perceived to have a conflict of interest, that she may be motivated to protect her own bills and her own interest. Her evidence must therefore fail the basic test of reliability because of a perceived lack of independence and objectivity.
The defendants’ lawyer also made spurious submissions about non-joinder of the costs assessor as a party (dealt with below) despite there being clear law preventing it.
In several respects therefore, the conduct and submissions have made the court’s task more difficult and time consuming than was necessary. These issues may be relevant to help determine what costs should be ordered for this review, and who should pay them. The following is an example.
Should the Costs Assessor have been joined as a necessary party?
While it could have been raised as a threshold issue at trial, it is now submitted in the written submissions on behalf of the defendants that the Costs Assessor should have been joined in the proceedings as a necessary party. For authority I was referred to State of Victoria v Sutton (1998) 195 CLR 291; (1998) 156 ALR 579; (1998) 72 ALJR 1386; [1998] 15 Leg Rep 2; (1998) 83 IR 1; [1998] HCA 56 per McHugh J at [77]. Mc Hugh J there stated the general principle of procedural fairness that “the rules of natural justice require that, before a court makes an order that may affect the rights or interests of a person, that person should be given an opportunity to contest the making of that order”. That case had nothing to do with costs assessors. The Australian Building Construction Employees’ and Builders Labourers’ Federation (the BLF) entered into a written agreement (the amalgamation agreement) with the Construction, Forestry, Mining and Energy Union (the CFMEU). It was expressed to bring about “an amalgamation and/or merger of the BLF into the CFMEU” so that “all assets and liabilities of the BLF shall merge with the assets and liabilities of the CFMEU”. The case concerned the effectiveness of the amalgamation agreement in light of Orders in Council previously made under Victorian legislation, the BLF (De-recognition) Act 1985 (Vic). McHugh J held that the rules of natural justice required the respondents to join the registered proprietors of the real estate and members of the BLF in a representative capacity so that the Industrial Relations Court of Australia did not make orders binding the rights of persons who were not afforded the opportunity of addressing the court.
I was also referred to News Ltd v Australian Rugby Football League Ltd (Super League case) (1996) 64 FCR 410; (1996) 139 ALR 193; (1996) 21 ACSR 635; (1996) 35 IPR 446; (1996) ATPR 41-521. That case had nothing to do with costs assessors either. In the Super League case, an action was brought against a rival rugby league competition organiser claiming damages for unlawful inducement of breaches of players' and coaches' contracts. The issue was that players and coaches were necessary parties who ought to have been joined. Previous orders were discharged because the orders had directly affected the players' and coaches' rights to, and liabilities against, their employers.
I was also referred to Wentworth v Wentworth (2001) 52 NSWLR 602; [2000] NSWCA 350 as authority for this submission by the defendants. However, in Wentworth v Wentworth; Estate of Wentworth [1999] NSWSC 317 Santow J found that a taxing officer engaged in taxation under the applicable rules of court enjoys a derivative immunity from suit as would a judicial officer of a superior court. In the appeal to the New South Wales Court of Appeal above, Heydon JA and Davies A-JA held that an order for costs against a person, who has not been joined as a party to the relevant proceedings should not be made, and if made, will be set aside. The appellant argued that the Court had power to make an order for costs against the Taxing Officer. However, Fitzgerald JA, (Heydon JA and Davies A-JA concurring) held at [58] that if judicial immunity is afforded to a judge in respect of his or her exercise of the court's power and jurisdiction, there is no justification for denying the same immunity to a master or registrar performing judicial functions in the exercise of the court's power and jurisdiction. It is the nature of the function being performed and the connection with the judicial process which determines whether or not immunity attaches. At [59] his Honour continued:
“[59] At the material time, the taxation of costs in proceedings in the Court was a judicial function carried out by a registrar in the exercise of the Court's jurisdiction and powers. … . The necessity which grounds the immunity of judges and masters of this Court requires that the same immunity apply to a court officer taxing costs in proceedings in the court pursuant to a court order.”
In Attorney-General of New South Wales v Kennedy Miller Television Pty Ltd [1999] NSWCA 158 where a costs assessor was appointed pursuant to the Legal Profession Act 1987 (NSW) and the Legal Profession Reform Act 1993 (NSW) the Court upheld a cost assessor's claim to immunity. The court held, applying Najjar v Haines (1991) 25 NSWLR 224; (1991) 10 BCL 272; (1991) 11 BCL 315, that a costs assessor, in the absence of misconduct or bad faith, should not be ordered to pay the costs of proceedings to review his decision. Kirby P held (at 233–235):
“… I have (with the other members of the Court) concluded that the common law immunity from an order for costs of a proceeding which miscarries, enjoyed by judicial officers, extends to a referee appointed by the Court under the Supreme Court Rules, Pt 72. I do so for the following reasons:
1. The judicial immunity is not accorded to judicial officers because of their status, education or titles. It is accorded because it is essential to the performance of their actual functions as judicial officers. Those functions require independence and removal from the risk that a disaffected party (of whom there is usually at least one) will challenge a determination and seek to make the person determining the dispute liable for damages and costs. If the determiner stood at risk of such liability, he or she would be under an intolerable pressure to consider personal consequences of any determination instead of the merits only of the matter in contest;
…
3. Under Pt 72 r 3(2), a referee may be a judge, master, registrar or other officer of the court. This provision underlines what is in any case apparent, namely the integration of the referee in the decision-making procedures of the Supreme Court. It would be an absurd consequence if a judge or master performing functions, as such, in the court were provided with the ordinary judicial immunity but not so provided if appointed, for a particular reason, to be a referee pursuant to the subrule;
…
5. The Court has, in a number of recent cases, extended judicial immunity although the judicial officer concerned was not performing an office as a judge but as persona designate appointed by statute. The Court has extended the immunity because the decision attacked was one ‘so intimately or immediately associated with the judicial functions as to attract the same immunity from suit as extends to acts or statements of judges in the course of exercising their judicial functions’: see Yeldham v Rajski (1989) 18 NSWLR 48, applying Stump v Sparkman 435 US 349 (1978); see also Rajski v Powell (1987) 11 NSWLR 522. By parity of reasoning, the referee's activities following appointment under the Supreme Court Rules, Pt 72, are so intimately and immediately associated with the judicial function of providing a judgment of the court following the referee's report, that the same rule should apply …”
Clarke JA held (at 248–251):
“… The referee was not a party to the proceedings. On the contrary he was deputed to perform major judicial functions in the resolution of the dispute between the parties at the trial level and the question which is raised is whether he, unlike a judge, master, or even jury, can be ordered to pay the costs incurred during the reference and later proceedings.
…
A judge is not liable to pay the costs of any party where an appeal is granted on the grounds of the apprehended bias of that judge. This is, no doubt, because a judge is immune from any action, be it for costs or otherwise, in respect of acts performed in the exercise of his or her judicial function: see Rajski v Powell (1987) 11 NSWLR 522; Yeldham v Rajski (1989) 18 NSWLR 48 and Sirros v Moore [1975] QB 118 at 132 per Lord Denning.
…
In the absence of authority the Court is bound to determine the question whether the referee should be accorded immunity and the extent of that immunity upon considerations of policy.
The major consideration in favour of granting to the referee immunity from action is that he or she is performing functions which are important to the decision-making in judicial proceedings before the Court. While the role of a referee cannot be equated with that of a jury there are important similarities in so far as they both seek to provide answers to factual disputes before the Court and neither of them gives a decision which is capable of being enforced as a judgment of the Court. Of course there are significant differences. … Quite apart from these considerations the members of the jury do not elect to try the facts in the case — once called and empanelled they are bound to do so and they receive payment from the State.
In these latter respects they are in a similar position to a judge but in quite a different one from the referee appointed under the Supreme Court Rules, Pt 72, who is paid by the parties and is not obliged to sit on a reference. The absolute right of a person nominated as a referee to decline to act in that capacity assimilates his or her position, to that extent, with that of an arbitrator's as also does the fact that a referee is paid by the parties.
For my part I would conclude that as a matter of policy, at least where there is no question of fraud or good faith involved, a referee appointed pursuant to the Supreme Court Rules, Pt 72, should be accorded an immunity from action. The consideration which leads me to that view is, primarily, the role played by the referee in the resolution of a case properly before the courts and which culminates in a judgment of the Court. Those factors which have led to the development of the doctrine of judicial immunity, such as the overriding importance of the need for a judge to act independently and without fear of harassment by action, apply also, in my opinion, in the case of a referee who is acting, in a sense, as a deputy judge.
I recognise that there are countervailing considerations which would support the view that a referee who has negligently carried out his or her fact finding task and thereby caused one or both of the parties considerable loss should be required to pay for that loss. This is an argument which has been pressed heavily in claims against arbitrators but has, in my opinion, much less force when the referee is appointed to take an important part in the resolution of a court dispute and whose determination is open to the close scrutiny of the court.
It necessarily flows from this conclusion that it would not be a proper exercise of judicial discretion to order that Mr Morris pay costs. Consequently, the motion for his joinder should be dismissed.
There are, however, two observations which I would wish to make. First, there is much to be said for the view that the immunity of a referee appointed under the Supreme Court Rules, Pt 72, should be the same as that of a judge. The policy considerations to which I have adverted support this view but, as it is unnecessary to resolve the question in this appeal, I prefer to reserve my opinion on it for another day.
In addition, as Rogers A-JA has pointed out, this view is consistent with the opinion of the United States Circuit Court of Appeals, expressed in Ashbrook v Hoffman 617 F 2d 474 (1980), and has found legislative expression in Victoria: Supreme Court Act 1986 (Vic), s 27A inserted by s 8 of the Courts (Amendment) Act 1990 (Vic).”
Rogers A-JA held (at 269–270):
“Immunity of referee:
In considering whether judicial immunity should attach to a referee it is necessary to examine the nature of a reference and the question whether the referee has the same immunity as a judge or any immunity of that kind. It has to be remembered that a referee, in contra distinction to the usual situation of arbitrators, who are consensually appointed by the parties, is an appointee of the court to whom, by order of the court, are entrusted many of the functions commonly appertaining to a judge. What then is the difference between a judge and a referee? Is the difference of such a kind that different concepts of immunity should apply?
There is no doubt that there are distinct personal and functional differences between judges and referees. As to functional difference in the discharge of duties, they are again twofold. First, the referee is not required to conduct a reference as though it were a trial and the referee were a judge (Xuereb). … A judge is, with some exceptions (for example, Supreme Court Act, s 82) required to adhere to the rules of evidence. A referee is not. A judge cannot use personal knowledge beyond the parameters of judicial notice. The whole rationale for appointing a technical expert is that the referee should draw upon the technical knowledge in which the expertise resides. A judge cannot make inquiries and cannot gather information except in the presence of the parties.
…
Secondly, in the functional field, there is the fact that the referee makes no decision. He expresses an opinion to the court. …
Immunity attaches to a judge in the performance of judicial duties not as a privilege of rank but as a requirement for the proper and effective discharge of the judicial function and for the more efficient administration of justice. Is the function of a referee sufficiently similar as to call for the same immunity?
This Court has recently re-affirmed that, in relation to matters in the execution of judicial duties, a judge has absolute immunity. …
This immunity rests on public policy. …”
Later, his Honour added (at 274–275):
“In the United States, Circuit Courts of Appeal have uniformly stated that ‘nonjudicial officials whose official duties have an integral relationship with the judicial process have also been held to have absolute immunity for their quasi-judicial conduct’. In Ashbrook v Hoffman 617 F 2d 474 (1980), the Court said (at 476):
‘Other nonjudicial officials whose official duties have an integral relationship with the judicial process have also been held to have absolute immunity for their quasi-judicial conduct. See, eg, Imbler v Pachtman, 424 US 409, 96 S Ct 984, 47 L Ed 2d 128 (1976) (prosecuting attorney has absolute quasi-judicial immunity for those activities intimately associated with the judicial phase of the criminal process); Kermit Construction Corp v Banco Credito Y Ahorro Ponceno 547 F 2d 1 (1st Cir 1976) (receivers absolutely immune even though engaged in ministerial acts); Lockhart v Hoenstine, 411 F 2d 455 (3d Cir), cert denied, 396 US 941, 90 S Ct 378, 24 L Ed 2d 244 (1969) (prothonotaries absolutely immune); Stift v Lynch, 267 F 2d 237 (7th Cir 1959) (justices of the peace enjoy quasi-judicial absolute immunity). The same policies which underlie the grant of absolute judicial immunity to judges justify the grant of immunity to those conducting activities intimately related to the judicial process. See Imbler v Pachtman, 424 US at 423–24, 96 S Ct at 991–992, Note, 68 Harv L Rev 1229 (1955). On one hand is the policy that an official making quasi-judicial discretionary judgments should be free of the harassment of private litigation in making those judgments. Imbler 424 US at 423, 96 S Ct at 991. On the other hand a nonjudicial officer who is delegated judicial duties in aid of the court should not be a “lightning rod for harassing litigation” aimed at the court. Kermit Construction, 547 F 2d at 3. Thus, if “acts, alleged to [be] wrongful, were committed by the officer in the performance of an integral part of the judicial process,” Robichaud v Ronan, 351 F 2d 533, 536 (9th Cir 1965), then the officer is absolutely immune from suit.
Whether particular office holders have quasi-judicial absolute
immunity for their acts depends on an analysis of the nature of the activities in which the office-holder engages and the relationship of those activities to the judicial process.’The last paragraph of the judgment is supported by the authority of the Supreme Court in Butz v Economou 438 US 478 (1978). Although there were four judges in dissent it was not on the point of present concern. The court as a whole was of the view that absolute immunity extends to all those whose work is ‘functionally comparable’ to that of a judge.
…
In Howard v Drapkin 271 Cal Rptr 893 (1990), the Court of Appeal held that a psychologist was entitled to common law immunity as a quasi-judicial officer participating in the judicial process. … The judge said (at 901):
‘… we believe it appropriate that these “nonjudicial persons who fulfil quasi-judicial functions intimately related to the judicial process” (Myers v Morris, supra, 810 F 2d at p 1466–1467) should be given absolute quasi-judicial immunity for damage claims arising from their performance of duties in connection with the judicial process. Without such immunity, such persons will be reluctant to accept court appointments or provide work product for the courts' use. Additionally, the threat of civil liability may affect the manner in which they perform their jobs. (Moses v Parwatikar ( 8th Cir 1987) 813 F 2d 891, 892, cert den 484 US 832, 108 S Ct 108, 98 L Ed 2d 67.)’
In similar vein the Construction List operates, I trust satisfactorily, only because of the assistance the Court receives from the referees. Their technical expertise is also drawn on in the work of the Commercial Division. Within the area of their technical knowledge they carry out the fact finding mission which is the stuff of life of a trial judge. It would be strange if judges were to appoint referees to assist them in the discharge of their duties but fail to accord to them the safeguards they themselves enjoy in the discharge of the self same mission.
In the result, in my view, I should conclude that public policy requires that a referee enjoy the same immunity as a judge. Accordingly no order for costs, or claim for damages, can be made against him.”
The position in Queensland
In the Supreme Court of Queensland Act 1991, section 93LA provides:
93LA Ordinary protection and immunity allowed
(1) In performing the functions of costs assessor, the person appointed as a costs assessor has the same protection and immunity as a judge performing the functions of a judge.
(2) A party appearing in a costs assessment has the same protection and immunity the party would have if the costs assessment were a proceeding being heard before the Supreme Court.
(3) A witness attending in a costs assessment has the same protection and immunity as a witness attending before the Supreme Court.
(4) A document produced at, or used for, a costs assessment has the same protection during the costs assessment it would have if produced before the Supreme Court.
(5) In this section— party includes a party’s lawyer or agent.Section 93LA is in the Supreme Court of Queensland Act 1991, Part 7 (Provisions applying to Supreme Court, District Court and Magistrates Courts), Division 5A (Costs assessors).
The first section in Part 7 is section 71, which provides:
71 Application of pt 7
(1) Unless this Act otherwise expressly provides, this part applies to the Supreme Court, District Court and Magistrates Courts.
(2) This part applies to civil proceedings and proceedings in relation to contempt of court.There is no express provision in Part 7 to say that section 93LA does not apply to proceedings in the Magistrates Court.
The cost assessor in this case had the same protection and immunity as a judge performing the functions of a judge. Therefore, judicial immunity protects him from being joined as a party and from any orders being made against him.
Section 93LA seems to assume that the common law Judicial Immunity applies to costs assessors.
Similar protections and immunities apply to Magistrates, Alternate Dispute Resolution Officers, Judicial Registrars, and other judicial or quasi-judicial officers either under the Magistrates Act, the Supreme Court of Queensland Act 1991 and under other State and Commonwealth statutes. The common law Judicial Immunity extends beyond freedom from civil and criminal actions.
In Zanatta v McCleary [1976] 1 NSWLR 230 the appellant was not entitled to call the trial judge to give direct evidence with respect to his adjudicative processes, that is, with respect to the considerations which led him to his decision, or the manner in which he exercised his judicial powers. Duke of Buccleuch v. Metropolitan Board of Works (1872) L.R. 5 H.L. 418, at pp. 433, 457, 458, 462 and Hennessy v. Broken Hill Pty. Co. Ltd. (1926) 38 C.L.R. 342, at p. 349 were applied. At pp 237-239 the Court of Appeal (NSW) held:
“I will consider Mr. Shand's point first, which depends upon the assumption that a judge is compellable to testify to the considerations which influenced his judgment. In Phipson on Evidence, 11th ed., par. 569, p. 244, this general statement appears: “Judges of the superior courts cannot be compelled to testify to matters which have arisen before them in other trials; though this does not extend to collateral incidents occurring during such trials — e.g., the attempted rescue of a prisoner in court. But there is no objection to the judge of an inferior court being called in some circumstances, although it would seem highly undesirable to call such a witness unless there was absolutely no other means of proving some piece of evidence vital to proceedings.”
Leaving aside the proof of “collateral incidents”, two cases are quoted as authority for these propositions. The first is R. v. Gazard (1838) 8 C. & P. 595; 173 E.R. 633. (6) (1838) 8 C. & P. 595; 173 E.R. 633. There, Patteson J. expressed the view that, on an indictment for perjury alleged to have been committed at Quarter Sessions, the Chairman ought not to be called upon to give evidence as to what the accused swore. His Lordship said: “He is the President of a Court of Record, and it would be dangerous to allow such an examination, as the Judges of England might be called upon to state what occurred before them in court.”
The second is R. v. Harvey (1858) 8 Cox C.C. 99, at p. 103, in which Byles J., in argument, said “that the judges of the superior courts ought not to be called upon to produce their notes. But the same objection was not applicable to the judges of the inferior courts. He saw no reason why they should not be called, and especially where, as in that case, the judge was willing to appear”.
I may say that I doubt that the distinction drawn between superior and inferior courts is a valid one. R. v. Gazard (6), applies the immunity to judges of courts of record; and the judge in R. v. Harvey, was a judge of the County Court which was then, and is now, a court of record; Levy v. Moylan (1850) 10 C.B. 189; 138 E.R. 78: See Taylor on Evidence, 11th ed., par. 938 (d).
These cases, however, do not determine the point I have to consider. They deal only with the circumstances in which a judge may be called to establish an event which occurred before him and which later becomes a vital ingredient in other proceedings. They were both cases of perjury and, presumably, the terms of the evidence impugned could have been proved aliunde.
To my mind, the general principle which governs the present case is found in Duke of Buccleuch v. Metropolitan Board of Works (1872) L.R. 5 H.L. 418, where the question was whether an arbitrator might be called as a witness in a legal proceeding to enforce his award. It seems to me that the headnote accurately summarizes the nature of the advice tendered by the judges, that is, that an arbitrator may be asked a question as to what passed before him, and as to what matters were presented to him for consideration. But no questions can be put to him as to what passed in his own mind when exercising his discretionary power on the matters submitted to him. Cleasby B. said, at p. 433:
“With regard to the competency of the umpire as a witness, I am not aware of any real objection to it. With respect to those who fill the office of Judge it has been felt that there are grave objections to their conduct being made the subject of cross-examination and comment (to which hardly any limit could be put) in relation to proceedings before them; and, as everything which they can properly prove can be proved by others, the Courts of law discountenance, and I think I may say prevent them being examined. But those objections do not apply at all to a person selected as arbitrator for the particular occasion by the parties, and he comes within the general obligation of being bound to give evidence. The practice entirely agrees with this; for it is every day's practice for the arbitrator to make an affidavit where a question arises as to what took place before him, and I have known him to be examined as a witness without objection.”
Lord Chelmsford said at pp. 457, 458.:
“To ask the umpire, as the counsel for the Defendants did, what led him to the conclusion as to the proper sum to be awarded, was really to inquire what passed through his mind before he formed his judgment. It would be, in my opinion, contrary to all principles so to scrutinise the exercise by an arbitrator of a discretionary power to award compensation; and I think that all the questions put with this object were objectionable, and the evidence given upon them ought to be struck out.”
And Lord Cairns observed , at p. 462:
“It appears to me that upon every point which may be considered to be a matter of fact with reference to the making of the award, the evidence of the arbitrator or umpire was properly admissible. He was properly asked what had been the course which the argument before him had taken — what claims were made and what claims were admitted; so that we might be put in possession of the history of the litigation before the umpire up to the time when he proceeded to make his award. But there it appears to me the right of asking questions of the umpire ceased.”
The Duke of Buccleuch's case, was cited by the High Court in Hennessy v. Broken Hill Pty. Co. Ltd. (1926) 38 C.L.R. 342, at p. 349, where Knox C.J., Gavan Duffy and Starke JJ. in a joint judgment said:
“Even Judges are competent witnesses, though they may not be compellable to testify as to matters in which they have been judicially engaged; but their evidence has been received upon matters which did not involve the exercise of their judicial discretions and powers.”
See also Ex parte Electronic Rentals Pty. Ltd.; Re Anderson (1970) 72 S.R. (N.S.W.) 532, at p. 536; 92 W.N. 672, at pp. 674, 675.
The Duke of Buccleuch's case (16), concerned the evidence of arbitrators; but their privileges cannot be greater than those of judges. Hence, in my opinion, the principle is this: A judge of a court of record cannot be compelled to testify to the considerations which led him to his decision, or to the manner in which he has exercised his judicial powers.
The principle is founded upon grounds of policy which are obvious enough; they were expressed by Cleasby B., in the passage quoted above. Its application does not mean that judicial determinations are shrouded from scrutiny. Ordinarily, a judge has a duty to state the reasons for his decision, and his failure to do so may itself amount to an error of law: Pettitt v. Dunkley [1971] 1 N.S.W.L.R. 376. Reasons are required because they will disclose error, if error exists. And a decision which is unreasonable or unjust may imply error, although its nature may not be discoverable: Australian Coal and ShaleEmployees' Federation v. The Commonwealth (1953) 94 C.L.R. 621, at p. 627, per Kitto J. So the giving of reasons protects the litigant by exposing appealable error. In the ordinary course protection is adequately conferred by this means, and it is hardly to be conceived that a disappointed litigant could be permitted to endeavour to extract some ground of appeal by examining the judge on his decision. In my view it is, therefore, not open to the appellant to call the learned judge to testify to the processes by which he reached his decision.”
See also Rota v Tukiri [2001] 1 NZLR 715, per Penlington J at[19] to [23]:
[19] In Re Golightly at p 302, Mahon J held that the Supreme Court of New Zealand, now the High Court of New Zealand, has inherent jurisdiction to set aside a witness summons where it is made clear that no admissible evidence in support of the summons can possibly be given. See also Gill v Fulumua (Court of Appeal, CA 19/78, 1 March 1978) and R v Lewes Justices, ex parte the Gaming Board of Great Britain [1971] 2 All ER 1126 at p 1132, per Lord Parker CJ. Likewise, if a witness summons is oppressive or an abuse of process, it will be set aside. See Senior v Holdsworth, ex parte Independent Television News Ltd [1976] QB 23 at p 43 and Henson v Van der Kaap (High Court, Hamilton, M 261/95 & M 279/95, 22 November 1995, Hammond J). It is a discretionary jurisdiction.
[20] More recently in England, Warren v Warren [1997] QB 488 dealt with the same issue. Lord Woolf MR at p 496 cited Cleasby B in Duke of Buccleuch v Metropolitan Board of Works (1872) LR 5 HL 418 at p 433. Cleasby B stated:
“With respect to those who fill the office of Judge it has been felt that there are grave objections to their conduct being made the subject of cross-examination and comment (to which hardly any limit could be put) in relation to proceedings before them; and, as everything which they can properly prove can be proved by others, the Courts of law discountenance, and I think I may say prevent them being examined.”
[21] The dictum of Lord Woolf MR in Warren is in line with an earlier statement of the New South Wales Court of Appeal in Zanatta v McCleary [1976] 1 NSWLR 230. In that case Samuels JA, having cited the Duke of Buccleuch case, went on to say at p 239:
“A judge of a court of record cannot be compelled to testify to the considerations which led him to his decision, or to the manner in which he has exercised his judicial powers.”
[22] Lord Woolf MR in Warren set the boundaries. At p 497, Lord Woolf said:
“The exception to the principle of compellability only applies to the judge being required to give evidence of those matters of which he became aware relating to and as a result of his performance of his judicial functions.”
[23] See also a helpful article entitled “Subpoena of Judges” [2000] NZLJ 198 by Tim Jenns, then a Judge's clerk to the Chief Justice.
In the High Court of Australia in Herijanto v Refugee Review Tribunal (2000) 170 ALR 379; (2000) 74 ALJR 698; (2000) 21(7) Leg Rep 33; [2000] HCA 16 Gaudron J at [16] held “the immunity is immunity from disclosing any aspect of the decision-making process. That is what is required to ensure freedom of thought and independence of judgment.”
In Saint v Holmes (2008) 170 FCR 262; (2008) 104 ALD 556; [2008] FCA 987 at [58] the Court held:
[58] In my view, evidence which exposes or purports to expose the means whereby the Committee came to its decision, is inadmissible for the purpose of impugning the decision of the Committee. This is because if evidence was admitted for that purpose the absolute immunity of the Committee from having to answer as to how they came to their decision, would be lost. I do not accept that the preclusion is limited to the class of evidence contended for by Dr Saint. Such a limitation is inconsistent with the width of the preclusion described by Gaudron J as “any aspect” of the decision-making process. Further, it is significant that in Herijanto (No 2) the plaintiffs were not seeking access to documents and information disclosing the thought processes of the Tribunal, but discovery of the documents which the Tribunal had accessed before making its decision. Gaudron J refused discovery on the basis that the preclusion extended to “any aspect” of the decision making process.
The judicial immunity given for the purpose of ensuring independence of judgment by members of the Judiciary also applies to costs assessors. The immunity prevents a costs assessor from being called as a witness to explain or defend in any way his exercise of discretion. It also prevents him from being joined as a party to these proceedings.
There is no merit in this argument.
Breach of Natural Justice
The Applicant submits that the applicant was denied natural justice by the costs assessor assessing and disallowing certain items which had not been objected to by the Defendants.
There is merit in this submission.
In Southwell v Jackson [2012] QDC 65 his Honour McGill DCJ dealt with a complaint that a Costs Assessor had alleged ‘secret communications’ with the other party where the other party’s files, including the files which the costs assessor had to examine so he could assess the bills, were in the possession of the Legal Services Commission, so that it became necessary to make arrangements for the files to be made available to the costs assessor. At [13] – [17] McGill DCJ held:
[13] … . Proceedings in a court of course must be conducted in the presence of both parties, or at least with both parties having the opportunity to be present, and there are strict limitations on private communications between parties to a proceeding and the judge responsible for it. (This matter is taken so seriously that ordinarily even communications about purely mechanical matters are handled through the judge’s associate, one of the reasons why it is essential that judges have associates.) Traditionally the process of taxing costs occurred before a registrar where the parties attended (or could attend) and any submissions about the taxation were made orally, but the current rules contemplate that, ordinarily, there will be no oral hearing before a costs assessor, (UCPR r 720(4)(b), and indeed a costs assessor does not have the powers of an assessing registrar under r 714 without an order of the court: r 715) and I understand that in practice assessment on the documents is always or virtually always used.
[14] Although the matter is not specifically dealt with by the rules, obviously the party who has obtained an order appointing a costs assessor has to communicate with the costs assessor to advise the assessor of the order, and to provide the documents which, under the order, are to be provided. The procedure on the assessment is to be decided by the costs assessor and, unless there is an oral hearing, ordinarily communications about this with the parties would take place in writing, or by telephone. … .
[15] Even if the function of a costs assessor is properly characterised as judicial, (Attorney-General (NSW) v Kennedy Miller Television Pty Ltd (1998) 43 NSWLR 729 at 739) I do not consider that there is any obligation under the rules of natural justice for all communications to be disclosed to the other party, where those communications are only concerned with the mechanical processes of the assessment. On the other hand, the costs assessor ought not to have acted on any submission as to the substance of the assessment contrary to the interest of a party without disclosing the submission to that party and giving that party the opportunity to respond to it: Roderick v Telecommunications Corporation (1992) 39 FCR 134 at 142-145. It follows that there ought not to have been any communication about the substance of the assessment from the applicants or their solicitors which was not disclosed to the respondent so that she could have the opportunity to respond to it, at least unless the assessor was entirely unpersuaded by the submission and was proposing to reject it. But there was no evidence of that in the present case.
…
[17] The procedure adopted by the assessor is required to be consistent with the rules of natural justice, but also required to be efficient: r 720(2)(a)(c). In my view, having no communication with either party unless a copy of that communication was disclosed to the other party is not required by the rules of natural justice, and would be inconsistent with the requirement of efficiency, bearing in mind that no oral hearing is contemplated. I conclude that there was no breach of natural justice involved on this basis in the present case.” (my underlining)As there are such strict limitations on private communications between parties to a proceeding and the judge (or magistrate) responsible for it, and despite the fact the applicant was apparently served with a copy of the unsolicited further submission by the Defendants’ legal representative, and given that the communication of those submissions to me were not merely concerned with mechanical processes, I have ignored them.
However, in Southwell v Jackson (above) his Honour Mc Gill DCJ also dealt with the issue of whether a Costs Assessor must confine the process of assessment to items the subject of specific objection, or to considering the items which are objected to only by reference to the grounds raised in the notice of objection. At [27] to [30] his Honour held:
[27] It seems to me that the only errors on the part of the assessor were in attributing the reduction to Objection 38 in the schedule of adjustments, and in failing to give reasons for this, no doubt because the matter had not been raised specifically in an objection. That gives rise to the question of whether the costs assessor can take into account anything which is not raised in an objection. In the case of a costs statement being assessed under Part 3 of Chapter 17A, r 722 requires an assessment to be limited to objections raised and otherwise to be dealt with under r 708. That rule by paragraph (3)(a) requires the costs assessor to allow the amounts claimed in the costs statement, though paragraph (4)(b) provides that this does not prevent the costs assessor correcting an obvious error in the costs statement.
[28] I suspect that an adjustment of this nature comes within the terms of that paragraph, and could be justified even if this assessment were under Part 3, but this assessment was under Part 4 and the Legal Profession Act. There is nothing in the Act which requires the assessment process to be limited to matters specifically raised in a notice of objection, and r 722 does not apply to an assessment under Part 4: r 743I. Traditionally a taxing officer taxing a bill examined the whole bill and considered every item, although no doubt in practice the fact that there was no particular objection to an item would ordinarily have some practical effect on the extent of that consideration. It was always open to the taxing officer to disallow or reduce an item if it were thought to be unjustified. I think that the fact that there is no limitation on the scope of the assessment in the Act is of particular importance when considering an assessment under the Act8, and in my view the obligation of a costs assessor under the Act is to have some regard to all matters in the bill, at least to the extent of picking up an error of this nature.
[29] I do not consider that there is anything confining the process of assessment to items the subject of specific objection, or indeed, to considering the items which are objected to only by reference to the grounds raised in the notice of objection, though this does give rise to an issue about the rules of natural justice. It does not appear that submissions were invited from the respondent in relation to these particular items, no doubt because, as proved to be the case when I asked her about the matter during the hearing, there was no submission she could advance in support of this part of the bill as drawn.
[30] … This is not a matter dealt with expressly in the reasons, but I suspect that the obvious explanation for disallowing the charge for postage was that the costs assessor concluded that the letter had not been posted, but simply handed over during that meeting. This may qualify as a technical deficiency in the reasons, but does not suggest that there was actually any real error in the process of assessment. In any case, I would not act on a point which only involved 50 cents. (my emphasis added)
Therefore, whether the assessment is to be conducted under part 3, or under part 4 and the Act, the Costs Assessor must observe procedural fairness.
In respect of a similar application, in Cosmetic Surgery Advisory Centre (of Australia) P/L v Hawthorn Cuppaidge & Badgery [2011] QMC 33 at [24], her Honour Magistrate Springer held there had been a breach of procedural fairness by denying Hawthorn Cuppaidge & Badgery the opportunity of making submissions to the assessor in relation to at least 2 documents. One was a ‘List of Objections’ which was prepared by Cosmetic Surgery Advisory Centre or its solicitors and forwarded to the costs assessor, but not to Hawthorn Cuppaidge & Badgery. The other was an email form the solicitors for Cosmetic Surgery Advisory Centre.
At [27] her Honour stated:
“The failure to ensure that the list of objections was provided to HCB is in my view a significant departure from the requirement to ensure procedural fairness. Further, in the absence of disclosure of all material or communications relied on by the costs assessor, particularly when communications were taking place between him and one or other of the disputing parties, it was not possible for each party to know what was being considered in the assessment. In those circumstances, in my view, it is appropriate to review the decision contained in the certificate. In my view, procedural fairness (or ‘natural justice‘ as is referred to in Rule 720) requires an opportunity for a party to know what material the costs assessor was considering and to be allowed the opportunity to make submissions about that.” (my emphasis added)
In Australian Coal & Shale Employees' Federation v Commonwealth (1953) 94 CLR 621; [1953] HCA 25, at [7] to [11] Kitto J dealt with the powers of a taxing officer. At [7] Kitto J held that apart from the duty to reconsider an allowance or disallowance objected to, a taxing officer has power to re-open his taxation in respect of any item in the bill at any time before he signs his certificate. Until then he has not completed the taxation of the bill so he is free to change his decision on any item if he thinks he has made an error. However, at [8] Kitto J added:
“But where, in respect of any item, the taxing officer does decide to tax off still more than the amount which is the subject of objection, he should appreciate that it is incumbent upon him to afford to the party adversely affected an opportunity to carry in objections to the new disallowance.” (my emphasis added)
In this case the Costs Assessor sent a letter dated 19 October 2010[7] to the Bernard Ponting & Co and to Nicholas Radich, being the Solicitors on the record for each party. He noted his appointment by an order of the Magistrates Court made on 4 October 2010, and then he referred the parties to the provisions of section 341 of the Act concerning the criteria for assessment and for the matters which he was required to consider in conducting the assessment. He also noted the Defendant’s solicitors intended to deliver submissions or a Notice of Objections in response to the two Bills of Costs. Finally, he issued formal Directions in order hat the assessment may be progressed.
[7] Exhibit “BFP” to Affidavit of Bernard Francis Ponting filed 2 December 2011.
No-one took any exception, nor made any objection, to the notations and directions.
The Directions included the following:
(1 )That the costs assessor’s fees were fixed at $250.00 per hour or part thereof;
(2 )That the costs assessment would be conducted in accordance with Chapter 17A, Division 3 of the UCPR and in accordance with Part 3.4, Division 7 of the Act;
(3 )That the Defendants were to deliver to him their objections or submissions in relation to the bills or to the directions by 9 November 2010;
(4 )That the Plaintiff would deliver to him any costs disclosures and costs agreements relevant to the work claimed in the two bills, and any submission in response to the objections or submissions made by the Defendants or in response to the costs assessor’s directions, by 30 November 2010;
(5 )That the Defendants then had until 7 December 2010 to him any supplementary submissions in respect of the Plaintiff’s submissions;
(6 )That the costs assessor would notify the parties in writing by 10 December 2010 of any further requirements he may have in order to finalise the assessment.
(7 )That the costs assessor would then notify the parties in writing by 15 December 2010 the particulars of his determinations of allowances and disallowances and his assessment fees.
(8 )That the parties would than have seven days to make written submissions about the costs of the assessment. The parties’ attention was drawn to section 342 of the Act.
In the interests of procedural fairness the costs assessor also informed the parties, in my view appropriately, that they were to communicate with him in writing, and copy to each other, any correspondence or submissions sent to him incidental to the assessment of the two bills.
The procedure outlined in those directions seems standard and appropriate to the task.
However, the Applicant complains that, without affording the Applicant an opportunity to be heard, the costs assessor assessed and disallowed items which were not objected to by the Defendants.
The Applicant claims this is both a denial of natural justice and a failure by the costs assessor to assess the bills in accordance with the scope, nature and amount of the assessment.
The items which fall into this category are summarised in the Affidavit of the only witness called and cross-examined before me, Ms Robyn Ann Nichols Davis, filed on 14 November 2011.
At exhibits RND3 and RND4 Ms Davis identified 42 items in the long bill and 5 items in the short bill which were not the subject of objections by the defendants but which were disallowed or reduced by the costs assessor.
The Defendants do not deny or contradict the fact that this process happened. Instead they submit[8] that there was no denial of natural justice because the solicitor knew from the commencement of the assessment that all of the costs in the bills were to be assessed and that he chose not to make submissions in support of some items in the bills.
[8] Para[32], Outline of Submissions for the Defendants dated 17 February 2012.
Following and applying the above cases, and as this assessment was under Part 4 UCPR and the Act, there is nothing in the Act which requires the assessment process to be limited to matters specifically raised in a notice of objection or submission, and r 722 does not apply to an assessment under Part 4.
The assessment process is not confined to items the subject of specific objection or to considering the items which are objected to only by reference to the grounds raised in the objection or submission.
However, as his Honour McGill DCJ found in Southwell v Jackson (above), this does give rise to an issue about the rules of natural justice. Before the costs assessor reduced or disallowed items which were not objected to by the Defendants he ought to have afforded the parties an opportunity to be heard because it was not otherwise possible for each party to know what was being considered in the assessment.
The costs assessor’s directions required from the Solicitor a submission in response to the objections or submissions made by the Defendants or in response to the costs assessor’s directions. Understandably, the directions did not call for a general submission to justify all the items in the Bill. Such a request may have been excessively onerous and superfluous. It is reasonable for the solicitor to expect that not all items needed to be justified to an assessor in advance of his or her assessment, and reasonable to expect that not all items would be objected to.
However, where a costs assessor then reaches a view that certain items not objected to, or not addressed in submissions by either party, could or should be reduced or disallowed, it is incumbent on him or her to notify the parties about those items and about his or her views, and to give the parties an opportunity to make relevant submissions. Either party may be aware of factors relevant to the complexities of the conduct of the proceedings, including discussions between the parties, which the assessor may not be familiar with or unable to glean from the papers, which explain either why an item was not objected to by the client or why the item can be justified by the solicitor.
Consequence of Breach of Natural Justice
The question then is whether I should, under rule 742(6), set aside this part of the Costs Assessor’s decision and whether the 47 items must be referred to him for reconsideration, with or without directions, or whether I should, as was the Plaintiff/Applicant’s primary position, assess those items myself.
In my view this omission by the Costs Assessor does not invalidate or taint the whole assessment. The Costs Assessor’s process and his reasons were otherwise sound. There is no evidence that the omission was anything more than an oversight.
However, because justice must not only be done but must be seen to be done it would not be appropriate to remit the 47 items to the Costs Assessor for reconsideration.
Therefore, I have assessed those 47 items myself.
I have taken into account the evidence of Ms Davis, such as it is, and the reasons provided by the Costs Assessor for exercising his discretions they way he did. I have taken into account the affidavit material filed and read in this Review, including the exhibits thereto. I have taken into account also the written submissions filed with the court in compliance with my directions at the end of the hearing.
Where there is conflict between the opinion of Ms Davis and the reasons provided by the Costs Assessor I prefer the reasons provided by the Costs Assessor. On my own assessment of those items I also agree with the reasons he stated in his Reasons dated 2 September 2011.
The plaintiff has not persuaded me that the Costs Assessor has acted on any wrong principle or fact or that the Costs Assessor has failed to take any relevant facts or principle into account or that he has placed undue weight on any factor.
I affirm the Costs Assessor’s assessment of these items.
Costs of the assessment exceed costs in dispute.
The Applicant submits that the costs of the assessment must be wrong because they exceeded the costs being assessed.
It is not disputed that the total cost of the assessment was more than the costs in dispute.
The costs assessment was in respect of two invoices. One invoice was in the sum of $17421.49. The second invoice was in the sum of $1199.50. The total of the bills being assessed was thus $18621.09.
On the other hand, the Costs Assessor determined:
a. his fees were $5246.23, and
b. the defendant’s solicitor’s costs of the assessment were $8905.61, and
c. the cost of providing the Costs Assessor’s reasons was $7892.50.
That is a total of $22044.34 for the costs of the assessment.The total costs of the assessment were thus $3423.14 (or 18.4%) more than the costs being assessed.
However, the assessment produced a very significant reduction of those bills. The costs assessor reduced the long bill by 41% and the short bill by 26%. This is addressed further later in this judgment.
The plaintiff argues that: “Prima facie, an assessment that costs in excess of the sum being assessed cannot possibly comply with the requirements of rule 720(2) UCPR which inter alia mandates … the procedure must be … appropriate to the scope and nature of the dispute and the amount in dispute. If implementation of the procedure results in the costs of the procedure exceeding the costs being assessed the necessary proportionality between the decided procedure and the amount in dispute must be absent.”
At first sight there seems to be the force of logic and common sense in that argument despite the fact the plaintiff did not cite any legal authority for the proposition, other than rule 720 UCPR.
[100]However, rule 720 relates to procedure, and procedure is only one component of getting the assessment right.
[101]The Applcant’s argument does not fully take into account the possibility that many of the costs items may be claimed illegitimately by the solicitor (resulting in disallowance) or that they may need adjustment (resulting in reductions). It also fails to adequately recognise the fact that the total cost of the assessment is composed of the costs assessor’s fees, plus the defendant’s solicitor’s costs of the assessment, plus the cost of providing the Costs Assessor’s reasons. The costs of the costs assessor’s fees were $5246.23.
[102]In the absence of independant evidence about the amount which should otherwise have been charged by the assessor I accept that the fee charged, which had been pre-determined and notified to the parties, was fair and reasonable and appropriate to the nature and scope of the assessment and for giving reasons.
[103]The costs assessor directed the plaintiff, for reasons of cost and efficiency, to identify in writing, by 7 April 2011, by reference to the ‘marked up’ invoices any decisions made by the costs assessor about which the plaintiff did not require reasons. The plaintiff did not respond. On 12 August 2011 the plaintiff again asked the costs assessor to provide reasons for his determination of his assessment.
[104]In my opinion, the costs assessor had no option but to provide reasons for the whole determination. He was also entitled to do so in the thorough and well reasoned manner in which he did.
[105]I also accept the assessor’s reasons for his decision that the solicitor had to pay the defendant’s solicitor’s costs of the assessment[9] including that the defendants’ legal position in relation to the plaintiff’s bills was vindicated, and that it was reasonable to engage solicitors with a reasonable cost agreement to do so, and that the vindicated defendants should not be left out of pocket.
[9] I have had regard to and accept the 12 findings made at pages 56 and 57 of the Costs Assessor’s reasons and the reasons for making those findings.
[106]It was also reasonable, and necessary, for the defendants to engage a solicitor to deal with the costs assessment owing to the relative complexity of the matter and because otherwise there could potentially have been a power imbalance between the parties.
[107]The Applicant has not satisfied me that the Costs Assessor has applied any wrong principle or consideration or that he has failed to take into account any relevant principle or consideration. The decisions are not plainly or prima facie wrong.
[108]The Applicant has failed to show that the discretion has not been exercised at all or that it was exercised in a manner which was clearly wrong.
Costs on the indemnity basis
[109]Section 342 of the Act provides:
342 Costs of assessment
(1) A costs assessor must decide the costs of a costs assessment.
(2) Unless the costs assessor otherwise orders, the law practice to which the legal costs are payable or were paid must pay the costs of the costs assessment if—
(a) on the assessment, the legal costs are reduced by 15% or more; or
(b) the costs assessor is satisfied the law practice failed to comply with division 3.
(3) Unless the costs assessor otherwise orders if, under subsection (2), the law practice is not liable to pay the costs of the costs assessment, the costs of the assessment must be paid by the party ordered by the costs assessor to pay those costs. (my underlining)
[110]In relation to indemnity costs, the authorities seem to accept that it is only when such costs are outlandish that they should be excluded.
[111]In Hook v Boreham & QBE Insurance (Australia) Limited [2006] QDC 304 his Honour A. Wilson DCJ, was dealing with Rule 704 UCPR (where a court can order costs to be assessed on the indemnity basis). His Honour held at [5]
“Although for some purposes costs on an indemnity basis are the equivalent of the former “solicitor and client” costs, it has been said they are to be assessed in a more liberal way. In Bottoms v Reser [2000] QSC 413 the Chief Justice was dealing with a reference from a Registrar assessing costs3. The costs ordered by the trial judge had been on a “solicitor and own client” basis and the Registrar apparently asked for guidance. In discussing the meaning of indemnity costs under r 704 the Chief Justice said:
“That encompasses all costs except so far as they may be of unreasonable amount or where unreasonably incurred. For recent examples of that formulation, see Helljay Investments Pty Ltd v Deputy Commissioner of Taxation [1999] HCA 56 at paragraphs 26 and 27 per Hayne J and Patrick Stevedores (Number 2) Pty Ltd v The Proceeds of Sale of Michael V Skulptor Komenkov [2000] FCA 1710 at para 11 per Tamberlin J. That approach is confirmed in the terms of r 704(3) which requires the Registrar to allow “all quotes reasonably incurred and of a reasonable amount”.
In approaching such an assessment, the Registrar ought to be conscious of the caution of the Vice Chancellor in EMI[10] that in determining reasonableness, “the receiving party will be given the benefit of any doubt” (see p 74). In other words, considerable liberality should ordinarily be extended in assessing reasonableness. That is indeed implicitly recognised by the reference in paragraph (b) of subrule 3 to any costs agreement between a client and the client’s solicitor. It would perhaps be an unusual case where, costs having been agreed in that way, they were then, on this process of assessment, to be excluded as “unreasonable”. Plainly however if they warranted characterisation as outlandish, they ought no doubt nevertheless to be excluded.
[10] EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59 at 65; [1982] 2 All ER 980 at 990; [1982] 3 WLR 245 per Sir Robert Megarry VC.
I emphasise my view in that such an assessment, no niggardly or unduly narrow approach would be warranted ... it would be odd, in short, if parties, having agreed upon an indemnity assessment, contemplated the possibility of a Registrar’s substantially cutting back upon the cost to be allowed, thereby leaving the donee of the order bereft of the indemnity envisaged. That is why the ultimate limitation is itself restricted to the unreasonable, but “unreasonable” viewed in the overall context – which invites consideration expressly in the terms between the client and the solicitor.” ”
[112]In Bottoms v Reser [2000] QSC 413 his Honour the Chief Justice, de Jersey CJ stated that considerable liberality should ordinarily be extended in assessing reasonableness and that no miserly or unduly narrow approach would be warranted. His Honour also accepted the approach taken in EMI Records v EM Wallace Ltd [1983] 1 Chancery 59 at 65, where Sir Robert Megarry held:
“The effect of an order on an indemnity basis is … that all the costs incurred
will be allowed except any which have been unreasonably incurred or are
of an unreasonable amount; and in applying these exceptions, the receiving party will be given the benefit of any doubt.”
[113]Here, the costs assessor reduced the long bill by 41% and the short bill by 26%. Even if the full sums were allowed for each of the 49 items to which the defendants did not object, the bills would still have been reduced by more than 15%.
[114]So far as the other items are concerned, I again accept the assessor’s reasons[11].
[11] I have had regard to and accept the 12 findings made at pages 56 and 57 of the Costs Assessor’s reasons and the reasons for making those findings.
[115]The Applicant has not satisfied me that the Costs Assessor has applied any wrong principle or consideration or that he has failed to take into account any relevant principle or consideration.
[116]The Applicant has failed to show that the discretion has not been exercised at all or that it was exercised in a manner which was clearly wrong.
CONCLUSION
For all of the above reasons the decisions of the costs assessor, contained in the certificate of assessment dated 2 September 2011, must be affirmed.
ORDERS
Pursuant to Rule 742(6)(e) of the Uniform Civil Procedure Rules 1999, the decisions of the costs assessor, contained in the certificate of assessment dated 2 September 2011, are affirmed.
If the parties are unable, by 5 pm on Friday 27 July 2012, to reach agreement about the costs of this review, then any party may apply to be heard by filing and serving an application and upon giving at least 10 business days notice of a date for hearing the application. Three business days before the hearing date the parties are each to file and serve a brief written outline of their respective submissions, each being no more than 3 pages in length.
John J Costanzo
Magistrate
Southport
13 July 2012
Written reasons for decision
(1) Within 14 days after receiving a copy of a cost assessor’s certificate of assessment, a party may make a written request to the costs assessor for reasons for any decision included in the certificate.
(2) If a costs assessor receives a request under subrule (1), the costs assessor must—
(a) within 21 days give written reasons for the decision to each of the parties who participated in the costs assessment; and
(b) give a copy of the written reasons to the registry of the court in which the certificate was filed.
(3) A party requesting reasons must pay the costs assessor’s reasonable costs of preparing the reasons and those costs form part of the party’s costs in any subsequent review.
(4) The court may publish written reasons in the way it considers appropriate. Example—The reasons may be published on the Queensland Courts website. (my underlining)
21
2