Ramsay v Gatland

[2022] NSWSC 1514

Supreme Court

New South Wales

Medium Neutral Citation:

Ramsay v Gatland [2022] NSWSC 1514

Hearing dates:

1 November 2022

Date of orders:

7 November 2022

Decision date:

07 November 2022

Jurisdiction:

Common Law

Before:

Schmidt AJ

Decision:

1. The appeal is dismissed.

2. The usual costs order under the Uniform Civil Procedure Rules 2005 (NSW) is that they follow the event. In this case that is an order that Ms Ramsay and Mr Conolly pay Ms Gatland’s costs, as agreed or assessed.

3. I understand that Ms Gatland may wish to be heard on the costs order. If she does not, I will make the usual order. If she does, she should approach within seven days to file and serve the orders which she seeks, together with short submissions. Within a further seven days Ms Ramsay and Mr Conolly should file and serve their short submissions and the parties should then indicate whether they wish further to be heard.

Catchwords:

COSTS — appeal from Local Court — barrister/solicitor — recovery — where barrister applied for costs assessment of unpaid invoices, some of which were brought out of time — Legal Profession Uniform Law 2014 (NSW), ss 194 and 198 — whether contractual claim for recovery of unpaid costs not assessed could still be pursued — Legal Profession Uniform Law 2014 (NSW), s 184 — whether legislative scheme precluded barrister’s application to Local Court — not found — such recovery of unpaid costs permissible

COSTS — Costs assessment — Determination — whether rejection of out of time application for costs assessment by the Manager, Costs Assessment and by a review panel resulted in a “costs determination” — Legal Profession Uniform Law Application Act 2014 (NSW), s 73 — operation of statutory regime — functions of the Manager, Costs Assessment — functions of costs assessors and review panels — decision that application is out of time does not involve a “costs determination”

CIVIL PROCEDURE — whether an abuse of process occurred in barrister bringing proceedings in Local Court for recovery of unpaid costs not assessed — whether risk of re-litigation exists — not found

ESTOPPEL — where species of estoppel is unspecified — whether barrister estopped from bringing proceedings in Local Court for recovery of unpaid invoices not assessed because costs assessment application made out of time — not found

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98

Legal Profession Act 1987 (NSW), s 192

Legal Profession Act2004 (NSW), ss 331, 355

Legal Profession Uniform General Rules 2015 (NSW), Pt 4.3

Legal Profession Uniform Law 2014 (NSW), Divs 3, 4, ss 3, 6, 169, 172, 184, 194, 196, 198, 199, 200, 204

Legal Profession Uniform Law Application Act2014 (NSW), Pt 7, ss 67, 68, 69, 70, 73, 78, 83, 84, 85, 87, 93B, 93C

Legal Profession Uniform Law Application Regulation 2015 (NSW), Pt 5

Limitation Act1969 (NSW), s 78

Uniform Civil Procedure Rules 2005 (NSW), r 42.1

Cases Cited:

Abdul-Rahman v WorkCover Authority of NSW (No 2) [2015] NSWSC 1900

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27

Branson v Tucker [2012] NSWCA 310

C Pty Ltd v Sommer (2021) 286 FCR 679; [2021] FCAFC 87

Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47

Carricks Ltd v Pizzaro (1995) 38 NSWLR 274

Gilles v Palmieri [2017] NSWCA 320

Herbert v Tamworth City Council (No4) (2004) 60 NSWLR 476; [2004] NSWSC 394

Hunter Quarries Pty Ltd v Mexon (2018) 98 NSWLR 526; [2018] NSWCA 178

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28

UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45

Category:

Principal judgment

Parties:

Elizabeth Ramsay (First Plaintiff)
Alan Robert Conolly (Second Plaintiff)
Jill Gatland (Defendant)

Representation:

Counsel:
Mr J Sexton SC (Plaintiffs)
Ms S Woodland (Defendant)
Solicitors:
Benson Law (Plaintiffs)
Adams & Partners Lawyers (Defendant)

File Number(s):

2022/122343

 Decision under appeal 

Court or tribunal:

Local Court

Jurisdiction:

Civil

Date of Decision:

1 April 2022

Before:

Atkinson LCM

File Number(s):

2020/00254063

JUDGMENT

1. Ms Ramsay and Mr Conolly appeal a decision of the Local Court concerning a dispute over unpaid costs which Ms Gatland, a barrister, claimed they were liable to pay to her, they being the partners of the firm A R Conolly & Co which had retained her to act in various matters in which costs agreements had been entered.

2. Various alleged legal errors are advanced as to the proper construction of s 73 of the Legal Profession Uniform Law Application Act2014 (NSW) and the operation of the statutory scheme, which it is claimed precluded the Local Court from making orders in Ms Gatland’s favour in relation to the disputed costs, despite the applications for costs assessment having been made out of time and the costs, as a result, not assessed.

3. Claimed abuses of process and estoppel are also raised.

4. There were eight invoices in respect of which Ms Gatland made applications for her unpaid costs to be assessed under the Application Act and the Legal Profession Uniform Law2014 (NSW). In the case of three of them, in the Bespoke and Bartlett matters, it was found that her applications had been made out of time. Contrary to the case Ms Ramsay and Mr Conolly advanced, Atkinson LCM took the view that this did not preclude Ms Gatland pursuing her claim for their payment in the Local Court.

5. Atkinson LCM did not accept that costs determinations to which s 73 of the Application Act applied had been made in respect of any of the three out of time invoices. In the case of the Bartlett invoice by the Manager, Costs Assessment and in the case of the two Bespoke invoices, by a review panel. Nor that the result of Ms Gatland’s out of times applications was that s 73 prohibited pursuit of the proceedings brought in the Local Court for payment of those invoices.

6. Her Honour also rejected the alternative arguments advanced. Namely, that it was an abuse of process for the proceedings to have been brought as they were and in the further alternative, that Ms Gatland was estopped from bringing them, given her applications for costs assessment.

7. Five grounds of appeal were pursued by Ms Ramsay and Mr Conolly on this appeal:

“1 The Magistrate erred in holding that the Manager, Costs Assessment, did not cause a costs determination within the meaning of section 73 of the Legal Profession Uniform Law Application Act 2014 to be made by rejecting the claim under the Bartlett invoice 258.

2 The Magistrate erred in holding that the Costs Review Panel did not make a costs determination within the meaning of section 73 of the Legal Profession Uniform Law Application Act 2014 by refusing to allow the claims under the Bespoke invoices 212 and 282.

3 The Magistrate erred in holding that section 73 of the Legal Profession Uniform Law Application Act 2014 did not prevent the plaintiff below from instituting the proceedings below in respect of any the invoices relied on in the proceedings below. The Magistrate should have held that section 73 prevented the plaintiff below from instituting the proceedings below in respect of all such invoices.

4 The Magistrate erred in holding that there was no abuse of process involved in the plaintiff below bringing the proceedings below.

5 The Magistrate erred in holding that the plaintiff below was not estopped from bringing the proceedings below.”

Issues

8. There was no issue that:

1. Ms Gatland issued one invoice in the Bartlett matter in 2016 and her 2018 application for costs assessment of that invoice was rejected by the Manager, Costs Assessment as being out of time. She did not challenge this rejection of her application;

2. the two invoices which Ms Gatland issued in the Bespoke matter had also been issued more than 12 months before she made her costs assessment application in 2018. But despite this they were accepted by the Manager, Costs Assessment, even though no application to have time extended had been made by Ms Ramsay or Mr Conolly;

3. instead Ms Ramsay and Mr Conolly contended before the costs assessor that the costs could not be assessed, the applications having been made out of time. That depended on the construction of s 198(3) of the Uniform Law. The costs assessor concluded that s 198(3) did not prevent those two invoices being assessed, with the result that the certificate of determination issued assessed the costs claimed under both out of time invoices, as well as five other invoices brought within time;

4. that conclusion was then successfully challenged by Ms Ramsay and Mr Conolly before a review panel. It concluded that the two invoices were out of time and so could not be assessed, but it agreed with the costs assessor’s assessment of the other five invoices;

5. the review panel’s certificate thus reflected its assessment of the costs of the five invoices where Ms Gatland had brought her application within time, the calculation of which the review panel explained in the reasons given, by deducting from the amount the costs assessor had arrived at, the sums assessed in relation to the two out of time invoices;

6. neither Ms Ramsay and Mr Conolly nor Ms Gatland appealed the review panel’s decisions and when Ms Gatland brought her proceedings in relation to the out of time invoices in the Local Court, they did not seek to have those invoices assessed; and

7. Atkinson LCM concluded that in all the circumstances Ms Gatland was entitled to pursue her contractual claim for payment of the three out of time invoices.

9. In issue in this Court thus remained the proper construction of s 73 of the Application Act and the operation of the statutory scheme; whether the Local Court proceedings involved an abuse of process; and whether Ms Gatland’s out of time costs assessment applications had estopped her from pursuing her Local Court application.

Did her Honour err in her construction of the statutory provisions?

10. What arises to be considered is whether rejection of an application for costs assessment made outside the applicable 12-month limitation period specified in s 198 of the Uniform Law, precluded a later application to the Local Court in respect of the unpaid costs.

11. That depends not only on the proper construction of s 73, but also on the operation of the statutory costs assessment regime. That arises to be considered in circumstances where firstly, an out of time application was refused by the Manager, Costs Assessment on receipt of the costs assessment application and thus not referred to a costs assessor for assessment. Secondly, where the out of time applications which were accepted were referred to a costs assessor who considered whether there was power to assess the applications given the time limit imposed by s 198(3) of the Application Act, and where the costs assessor’s conclusion that there was power to assess those invoices was then successfully challenged on an application for review made to a review panel.

12. The construction question thus depends on whether the Manager, Costs Assessment or the review panel made a “costs determination” for the purpose of s 73 of the Application Act in relation to the out of time applications. That term is not defined in either the Application Act or the Uniform Law. What is in issue also depends on the way in which the statutory regime regulates the bringing of legal proceedings, once applications for costs assessments have been made.

The Local Court’s judgment

13. Before turning to the statutory regime, the conclusions reached by Atkinson LCM which are challenged for legal error need to be appreciated.

14. Her Honour ordered Ms Ramsay and Mr Conolly to pay Ms Gatland a fixed sum of $38,358.48, including interest, for reasons given on 1 April 2022 in respect of the disputed costs. There her Honour noted that there was no written costs agreement between the parties. Ms Gatland’s practice had been to provide a costs agreement and disclosure as soon as possible after she received a brief, but a signed costs agreement had never been provided, even though thereafter Ms Ramsay and Mr Conolly had continued to instruct her. In the result she understood their conduct to mean that the agreement and disclosure had been accepted.

15. That the parties were bound by those costs agreements as a result was not challenged in these proceedings.

16. Her Honour then explained the evidence before turning to deal with the issues lying between the parties, namely:

1. was the contract for the provision of legal services between Ms Gatland and the defendants, or between Ms Gatland and the respective clients;

2. the s 73 issue;

3. if any monies are outstanding, is the Local Court required to assess the reasonableness of Ms Gatland’s fees and does it have power to do so; and

4. does s 98(4) of the Civil Procedure Act 2005 (NSW) prevent the court from ordering that the plaintiffs pay Ms Gatland’s fees or does s 98(4) prevent the Court from making a costs order?

17. Her Honour also identified a further issue, whether Ms Gatland’s costs agreement had been amended by someone in the firm before being sent to the client for signature, which she considered warranted further investigation. The result was that she directed the Registrar to forward a copy of the judgment and file to the Office of the Legal Services Commissioner.

18. Her Honour found that the costs agreements were between Ms Gatland and Ms Ramsay and Mr Conolly, not between her and the clients: at [85]-[86]. Their contract was not dependent on Ms Ramsay and Mr Conolly being put into funds by their clients: at [87]-[90].

19. Some of Ms Gatland’s invoices were not eligible to be dealt with under the statutory scheme: at [104]. The Bartlett invoice was rejected by the Manager, Costs Assessment, who had no power to make a costs determination and recognised that in the circumstances. Nor did a costs assessor: at [105].

20. The review panel correctly took the view that neither the Manager, Costs Assessment nor the costs assessor had jurisdiction to deal with the two Bespoke invoices which were more than 12 months old: at [106].

21. In the circumstances there was no abuse of process in Ms Gatland pursuing payment of the invoices in the Local Court and she was not estopped from doing so: at [107]-[110].

22. By her affidavit Ms Gatland had explained the work she had carried out and what she had billed. Her Honour noted that the costs assessor had concluded that her rates were fair, reasonable and proportionate, falling at the lower end of the range that counsel usually charged, a view not challenged in the Local Court, despite Ms Ramsay and Mr Conolly having pleaded that they did not agree that the fees charged were reasonable: at [111]-[116].

23. The Local Court was in a position to determine what was owing under the contract between the parties, on that evidence: at [125]-126].

24. Atkinson LCM concluded that s 98(4) of the Civil Procedure Act was not relevant to the exercise of the Court’s powers, it being concerned with the power to order costs in particular proceedings which are before the Court: [132]-[135].

25. The evidence having established the work was performed under the parties’ contracts and s 184 of the Uniform Law permitting Ms Gatland to enforce the costs agreements which they had entered, she was not prevented by s 73 of the Application Act or s 98(4) of the Civil Procedure Act from recovering the unpaid costs which Ms Ramsay and Mr Conolly had a contractual obligation to pay her. Section 184 provides that “Subject to this Law, a costs agreement may be enforced in the same way as any other contract.”

The parties’ cases

26. The effect of the case advanced for Ms Ramsay and Mr Conolly was that Atkinson LCM fell into error, the result of a law practice’s application for costs assessment, even if brought out of time, so that the costs cannot be assessed under the statutory scheme. It having the draconian outcome that thereby, the law practice’s common law contractual right to recover the unpaid costs is lost.

27. That is because, they contend, of the clear intent of s 73. Namely, that a determination of an application, whether made by the Manager, Costs Assessment, a costs assessor or review panel, which results in the conclusion that the application has been brought out of time, so that no costs can be assessed as being payable, is that the resulting costs determination is binding. The costs payable having thereby been determined to be nil. That determination cannot be challenged or pursued, otherwise than by way of appeal under s 89 in Pt 7 Legal costs—costs assessment of the Application Act, which provides for appeals to the District or Supreme Courts in specified circumstances.

28. That result is argued to be consistent with s 78 of the Limitation Act1969 (NSW). It having the result that a limitation law such as that enacted by s 198(3) of the Uniform Law, must be “construed as a determination of the substantive rights of the parties in respect of such costs”.

29. It was accepted that a costs determination affected by jurisdictional error is not a costs determination within s 73 of the Application Act: C Pty Ltd v Sommer (2021) 286 FCR 679; [2021] FCAFC 87. But still contended was that the correct rejection of an out of time application for costs assessment does constitute a costs determination to which s 73 attaches. That being consistent with authorities which have commented on the undesirability of the Court deciding questions which should be decided under the costs regime: Herbert v Tamworth City Council (No 4) (2004) 60 NSWLR 476; [2004] NSWSC 394 at [32] and Abdul-Rahman v WorkCover Authority of NSW (No 2) [2015] NSWSC 1900 at [42].

30. Ms Gatland’s case was that the legislative scheme did not evince the intention of depriving courts of competent jurisdiction of the power to determine a common law contractual claim for payment of outstanding fees, in circumstances where those fees could not be assessed under the statutory costs assessment regime, because a costs assessment application had not been made within the 12-month limitation period: Carricks Ltd v Pizzaro (1995) 38 NSWLR 274. It evinced the contrary intention.

31. Further, that when construing s 73 of the Application Act, proper regard had to be paid to other relevant provisions of the legislative scheme, which did not permit the construction for which Ms Ramsay and Mr Conolly contended. They included that only costs assessors and review panels are empowered to make costs determinations, not the Manager, Costs Assessment and that in order to attach the operation of s 73, a costs determination has to satisfy the requirements of applicable sections such as s 70 of the Application Act and s 199 of the Uniform Law. They could not be satisfied in the case of costs which had not been assessed, because the application itself had been brought out of time.

32. Further, s 73 of the Application Act did not apply to other decisions costs assessors and review panels were empowered to make, such as in relation to anterior or incidental question of fact or law, when determining an application for costs assessment or exercising any other of their functions: s 93C(3) of the Application Act. They included determining whether an application was within power, that being dependent on having been brought within time.

33. For reasons which follow I am satisfied that the case advanced for Ms Ramsay and Mr Conolly cannot be accepted.

How the statutory regime must be construed

34. It is convenient to begin with how the construction of the disputed statutory provisions must be approached.

35. As discussed in Gilles v Palmieri [2017] NSWCA 320 at [31], there in the context of predecessor legislation, “statutory provisions must be construed in a way that causes the statute to operate as a coherent whole” citing Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28, at [69]-[71]. There in issue were the provisions which earlier regulated proceedings for recovery of unpaid legal costs and the question of whether costs assessors could deal with arguments that a right of recovery was time barred.

34. In Hunter Quarries Pty Ltd v Mexon (2018) 98 NSWLR 526; [2018] NSWCA 178 it was explained that construction of an undefined statutory term “does not involve a “gloss” on the statutory language, or “require that words … be read into the statute””: at [61]. Further, that the purpose and context of the provision must be considered as explained by Gleeson CJ in Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47 at [5]:

"[5] ... In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act is to be preferred to a construction that would not promote that purpose or object. As to federal legislation, that approach is required by s 15AA of the Acts Interpretation Act 1901 (Cth). It is also required by corresponding State legislation, including, so far as presently relevant, s 18 of the Interpretation Act 1984 (WA). That general rule of interpretation, however, may be of little assistance where a statutory provision strikes a balance between competing interests, and the problem of interpretation is that there is uncertainty as to how far the provision goes in seeking to achieve the underlying purpose or object of the Act. Legislation rarely pursues a single purpose at all costs. Where the problem is one of doubt about the extent to which the legislation pursues a purpose, stating the purpose is unlikely to solve the problem. For a court to construe the legislation as though it pursued the purpose to the fullest possible extent may be contrary to the manifest intention of the legislation and a purported exercise of judicial power for a legislative purpose."

37. It follows that the construction of s 73 of the Application Act must be approached in light of the statutory objectives, as well as in light of the obligations which the legislative scheme now imposes on law practices as to the costs which they can charge and in the case of disputes over payment, how they may be pursued by either clients or law practices.

Section 73

38. Section 73 of the Application Act provides:

A costs determination is binding on all parties and no appeal or other assessment lies in respect of the determination, except as provided by this Part.

39. The term “costs determination” is not defined. What it means must be determined in the context of the legislative scheme as a whole.

40. That requires an appreciation that the Manager, Costs Assessment is not involved in the assessment of costs. Further, that not all decisions which costs assessors and review panels are called on to make in respect of an application for costs assessment are concerned with its assessment or the making of a resulting determination and certificate, which can then be enforced under the statutory scheme. But such decisions can still be reviewed and ultimately appealed: s 89 of the Application Act.

The statutory scheme

41. There is no object provision in the Application Act, but construction of s 73 of the Application Act and the scheme as a whole must be approached in light of s 3 of the Uniform Law. It relevantly provides:

3 Objectives

The objectives of this Law are to promote the administration of justice and an efficient and effective Australian legal profession, by—

…

(c) enhancing the protection of clients of law practices and the protection of the public generally; and

(d) empowering clients of law practices to make informed choices about the services they access and the costs involved; and

(e) promoting regulation of the legal profession that is efficient, effective, targeted and proportionate; and

…

42. Importantly, these objectives are concerned not only with client protection, but also proportionate regulation of the legal profession. That explains both why the regulatory scheme does not require all legal costs to be assessed and why payment of any unpaid costs by the pursuit of legal proceedings against a client is not precluded, as s 184 of the Uniform Law reflects.

43. This also reflects that s 172(1) of the Uniform Law requires a law practice to charge costs that are no more than is fair and reasonable in all the circumstances; are proportionately and reasonably incurred; and proportionate and reasonable in amount.

44. A costs agreement is prima facie evidence that legal costs disclosed in the agreement are fair and reasonable, if the provisions of Div 3 relating to costs disclosure have been complied with and the agreement does not contravene, and was not entered into in contravention of, any provision of Div 4: s 172(4) of the Uniform Law. This provision is thus relevant both in the case of an application for costs assessment and in proceedings brought in a Court to recover unpaid costs.

45. It is s 198(3) of the Uniform Law which provides that an application for costs assessment must be made within 12 months after a bill is given to, or the request for payment is made to the client. Time may be extended if the costs assessor or a designated tribunal, on application by the costs assessor or the client, who has had regard to the delay and the reasons for the delay, determines that it is just and fair for the application for costs assessment to be dealt with after the 12-month period: s 198(4) of the Uniform Law. Otherwise unpaid costs must be recovered by the pursuit of legal proceedings.

46. That is because s 198 of the Uniform Law does not provide for time to be extended on application by a law practice. The statutory regime thus contemplates that while applications for extension of time for a costs assessment may be made, if there is no application by a person entitled to make such an application, an application made out of time by a law practice cannot be entertained, even by a costs assessor in the event that it is accepted and referred.

47. A “costs assessor” is defined in s 6 of the Uniform Law to mean:

(a) a person appointed by a court, judicial officer or other official to have the responsibility of conducting costs assessments; or

(b) a person or body designated by jurisdictional legislation to have that responsibility;

48. This definition does not encompass the Manager, Costs Assessment, who is given different responsibilities under the statutory scheme.

49. The Manager, Costs Assessment, a registrar of this Court appointed by the Chief Justice, is given administrative responsibility for applications for costs assessment: s 93B of the Application Act. The Manager, Costs Assessment has the functions conferred by the Application Act and the Uniform Law and his or her acts and decisions are reviewable by the Court in the same way as acts and decisions of other registrars: s 93B(3) of the Application Act.

50. The Manager, Costs Assessment’s functions do not include extending time to bring a costs assessment application, that being regulated by s 198(4) of the Uniform Law, or undertaking a costs assessment, which falls to costs assessors and review panels. But the Manager, Costs Assessment does have power to extend the period fixed for lodging an application for review of a costs assessor’s certificate: s 83 of the Application Act. And to also apply for a review of a costs assessor’s determination: s 84 of the Application Act.

51. Section 68 of the Application Act prescribes how applications for costs assessment must be made in accordance with the rules, by filing with the Manager, Costs Assessment, accompanied by the applicable fee. The Manager, Costs Assessment also has power to waive or postpone payment of fees, or to refund fees for an application which does not proceed: s 68(3) and (4) of the Application Act. It follows that the latter is a power which would be exercised if an out of time application was not accepted by the Manager, Costs Assessment.

52. Section 70(5A) of the Application Act also provides that the role of the Manager, Costs Assessment, in relation to costs certificates is to be dealt with by regulation, but not relevantly to what is here in issue.

53. If an application for costs assessment is made within time, or if out of time, time is extended by a costs assessor or designated tribunal on application of a person entitled to seek such an extension, s 67 of the Application Act is engaged. It requires assessments of legal costs to be conducted in accordance with the costs assessment rules, “[s]ubject to this Act and the Legal Profession Uniform Law(NSW)”. It is that exercise which eventually results in a “costs determination” made either by a costs assessor or a review panel.

54. Section 69 of the Application Act specifies how costs assessment applications must be considered by a costs assessor, who is not bound by the rules of evidence, but may conduct oral hearings and consider submissions made.

55. If an application referred to a costs assessor has not been brought within time, which is an issue which may be raised before the costs assessor, or where there is an application for extension of time, whether the costs can be assessed is a matter for the costs assessor to determine.

56. Costs Assessors are also appointed by the Chief Justice: s 93C(1) of the Application Act. They have functions that are conferred by or under the Application Act and the Uniform Law: s 93C(2) of the Application Act. They include the function of making a costs assessment. Section s 93C(3) of the Application Act also empowers costs assessors to determine “any anterior or incidental question of fact or law”, for the purpose of determining an application for costs assessment, or exercising any other of their functions.

57. Necessarily, I am satisfied, that must include determining whether an application for costs assessment can be entertained given the time limit specified in s 198C(3) of the Uniform Law.

58. While an application which is out of time on its face may not be received by the Manager, Costs Assessment, there may be applications which are not clear and so must be referred to a costs assessor for consideration. An invoice may, for example, be undated. Even if an out of time application is wrongly received, because an application for extension has not been made, that can be raised for the costs assessor to determine. Whether the application has been brought within time, is plainly an anterior question then necessarily having to be resolved before the costs are assessed.

59. That is because if not brought within time, a statutory costs assessment cannot be entertained unless time is extended. It follows that a costs assessor’s decision that the application was out of time is thus not a “costs determination” to which s 73 of the Application Act applies.

60. That conclusion is supported by other statutory requirements.

61. If an application can be entertained, s 70(1) of the Application Act requires that on making the costs determination, the costs assessor must issue a certificate that sets out the determination, which includes:

(a) the amount of costs determined (including any GST component the costs assessor determines is payable), and

(b) the amount of any costs of the costs assessment determined under section 78 of this Act or section 204 of the Legal Profession Uniform Law(NSW), and

(c) any interest on those amounts—

(i) determined under section 81 of this Act, or

(ii) payable under section 101 of the Civil Procedure Act 2005.

62. Section 78 of the Application Act is concerned with the assessment of ordered costs and s 204 of the Uniform Law with the determination of the costs of the costs assessment. A decision that an application cannot be entertained will not result in a certificate which satisfies the requirements of s 70(1) of the Application Act, because the costs will not have been assessed with the result that no amount of costs payable can have been determined in accordance with the other applicable requirements of the scheme.

63. Such a certificate could thus not reflect an assessment or resulting determination that nil costs are payable.

64. It follows that it can only be a costs assessor’s certificate which satisfies the requirements of s 70(1) of the Application Act, which will be one to which s 73 of the Application Act attaches, unless it is the subject of a successful review application.

65. In undertaking the costs assessment which results in a s 70 certificate, s 199 of the Uniform Law also applies, in the case of legal costs payable on a solicitor-client basis: s 196 of the Uniform Law. Section 199 requires that costs assessments be conducted in accordance with Pt 4.3 Legal costs of the Legal Profession Uniform General Rules 2015 (NSW) and any applicable jurisdictional legislation. That includes the 12-month time limit imposed by s 198 of the Uniform Law and those which flow from the Limitation Act.

66. Section 199(2) of the Uniform Law also requires the costs assessor on an assessment to:

(a) determine whether or not a valid costs agreement exists; and

(b) determine whether legal costs are fair and reasonable and, to the extent they are not fair and reasonable, determine the amount of legal costs (if any) that are to be payable.

67. The objectives of Pt 4.3 of the Uniform Law are also relevant. They are specified in s 169 to be:

(a) to ensure that clients of law practices are able to make informed choices about their legal options and the costs associated with pursuing those options; and

(b) to provide that law practices must not charge more than fair and reasonable amounts for legal costs; and

(c) to provide a framework for assessment of legal costs.

68. In considering whether legal costs for the legal work undertaken are fair and reasonable, costs assessors must also apply the principles in s 172 of the Uniform Law, earlier referred to, so far as they are applicable: s 200(1) of the Uniform Law. Section 172(2) of the Uniform Law requires the costs assessor to have regard to whether the legal costs reasonably reflect:

70   Certificate as to determination of costs to parties

…

(a) the level of skill, experience, specialisation and seniority of the lawyers concerned; and

(b) the level of complexity, novelty or difficulty of the issues involved, and the extent to which the matter involved a matter of public interest; and

(c) the labour and responsibility involved; and

(d) the circumstances in acting on the matter, including (for example) any or all of the following—

(i) the urgency of the matter;

(ii) the time spent on the matter;

(iii) the time when business was transacted in the matter;

(iv) the place where business was transacted in the matter;

(v) the number and importance of any documents involved; and

(e) the quality of the work done; and

(f) the retainer and the instructions (express or implied) given in the matter.

69. None of these considerations arise, nor can these obligations be complied with, when a costs assessment is not undertaken, because the application was brought out of time.

70. Part 4.3 of the Uniform Rules and Pt 5 of the Legal Profession Uniform Law Application Regulation 2015 (NSW) also deal with legal costs and their assessment, but not relevantly for the issues here arising to be resolved.

71. If not successfully challenged by an application for review, s 70(5) of the Application Act permits a certificate, which specifies that a money sum is payable, issued by the costs assessor, to be filed in the office or registry of a court having jurisdiction to order the payment of that amount of money. The result is then that with no further action, it is taken to be a judgment of that court for the amount unpaid.

72. If a review panel substitutes its determination and certificate for those issued by the costs assessor, it is the review panel’s certificate which may be registered.

73. In the case of an application for review of a costs assessor’s determination, the review panel carries out the same functions as the costs assessor and so must determine the application, “in the manner that a costs assessor would be required to determine an application for costs assessment”: s 85(2) of the Application Act.

74. It follows that a binding costs determination the subject of s 73 of the Application Act, whether made by a costs assessor or review panel, can only be one which results from a costs assessment which adheres to these various statutory requirements when the assessment of the costs is actually undertaken.

75. The outcome of that consideration is a determination, under the statutory scheme, of the amount of the fair and reasonable costs payable. It is that which is reflected in the “costs determination” evidenced by the certificate which the costs assessor or review panel issues and the result of that exercise which is the subject of the s 73 protection. Only such a certificate evidencing those costs may be filed in a court and then enforced as a judgment.

76. By way of contrast, a decision that an application was made out of time, cannot be a “costs determination”, so protected and enforceable. A decision reflecting that the application was made out of time is necessarily anterior to any costs assessment and can thus not attract the operation of s 73 of the Application Act. Any certificate issued as a result could not indicate that nil costs were payable, because no assessment of the fairness and reasonableness of the costs charged can have been undertaken in accordance with the requirements of the statutory scheme.

77. In the result, the contention that s 73 of the Application Act could attach to a decision about an out of time application, the determination and resulting certificate evidencing that the costs assessment was that nil costs were recoverable, cannot be accepted. Such a certificate rather reflects the conclusion that there was no power to assess the costs the subject of the out of time application, with the result that those costs have not been assessed and no statutory costs determination has been made.

78. In the case of a review panel, parties are entitled to have a costs assessment reviewed on application made within 30 days of the certificate of determination being forwarded to them: s 83 of the Application Act. The Manager, Costs Assessment may also make a review application within that time: s 84 of the Application Act.

79. A review panel may then set aside the costs assessor’s determination and substitute its own determination, in which event it must also issue a certificate that sets out its determination, which includes the amounts set out in s 70(1)(a)-(c): s 87(1) of the Application Act.

80. It follows that if on such a review, contrary to the conclusion reached by a costs assessor, the review panel concludes that the application was brought out of time, with the result that it could not be assessed under the statutory scheme, the review panel can also not assess the costs which are fair and reasonable, in accordance with the requirements of s 70 of the Application Act and s 199 of the Uniform Law.

81. In such a case the review panel’s decision will thus also not result in a “costs determination” to which s 73 of the Application Act attaches.

Regulation of the commencement of legal proceedings.

82. These conclusions are consistent with how the statutory scheme regulates the bringing of legal proceedings to recover unpaid costs.

83. They confirm the conclusion that s 73 does not have the draconian result for which Ms Ramsay and Mr Conolly contended when an out of time application is made. That is because the legislative scheme itself contemplates the pursuit of legal proceedings in respect of unpaid costs which cannot be assessed.

84. Section 194 of the Uniform Law regulates when legal proceedings to recover legal costs may be brought, providing:

194   Restriction on commencing proceedings to recover legal cost

1) A law practice must not commence legal proceedings to recover legal costs from a person unless a bill has been given for the legal costs and the bill complies with the requirements of this Law and the Uniform Rules.

(2) A law practice must not commence legal proceedings to recover legal costs from a person who has been given a bill until—

(a) where the legal costs are the subject of a costs dispute before the designated local regulatory authority—the authority has closed or resolved the dispute; and

(b) at least 30 days after the later of—

(i) the date on which the person is given the bill; or

(ii) the date on which the person receives an itemised bill following a request made in accordance with section 187.

85. There was no suggestion in this case that there was any such costs dispute in relation to the three invoices in issue. Rather, what was disputed on assessment was whether Ms Gatland’s applications for costs assessment had been made within the 12-month limitation period imposed by s 198 of the Uniform Law and in the Local Court, whether the proceedings were available to be pursued, given the proper construction of s 73 of the Application Act.

86. There is no conflict between ss 73 and 194, given what they respectively regulate, which also accords with what is provided in s 198(7). It precludes commencement of legal proceedings only if an application for costs assessment has been made and then “until the costs assessment has been completed”. It is relevant that commencement of such proceedings does not depend on a costs determination or certificate having been issued. That reflects that not all decisions which bring an assessment application to an end involve such a determination, including in the case of out of time applications.

87. It follows that the proceedings Ms Gatland commenced in the Local Court after the review panel issued its determination and certificate were brought in accordance with requirements of ss 194 and 198.

88. That conclusion accords with what was decided in Gilles, where the provisions of predecessor legislative schemes arose for consideration.

89. In Gilles, both recovery proceedings and an application for costs assessment had been brought by a law practice. In issue was whether s 331 of the Legal Profession Act2004 (NSW) or s 192 of the Legal Profession Act1987 (NSW), applied. Those provisions, like s 194 of the Uniform Law, also precluded a law practice pursuing proceedings for the recovery of costs unless at least 30 days had passed since a bill for those costs had been given to the client.

90. In the 1987 Legal Profession Act, however, there was no explicit prohibition upon the commencement of recovery action once 30 days had passed, even if an application for costs assessment had been made and the assessment had not been completed. But s 355(b) of the 2004 Legal Profession Act precluded a law practice from commencing or maintaining any proceedings to recover such legal costs, until the costs assessment had been completed. Section 198(7) of the Uniform Law does not preclude the maintenance of such proceedings if already commenced.

91. It was concluded in Gilles that in the circumstances it was the provisions of the 1987 Legal Profession Act which applied, with the result that the recovery proceedings brought in the District Court were not precluded.

92. There consideration was also given to whether leave to appeal should be given, in circumstances where, if the District Court proceedings were reinstated, recovery of the legal costs could proceed without barrier under s 198(7) of the Uniform Law, even while the application for costs assessment was on foot. Leave to appeal was granted, Barrett JA observing at [45] that the costs assessment process “is, first and foremost, a means of quantifying the amount properly payable to a lawyer.”

93. Thus the view taken was that while the 1987 Legal Profession Act did not preclude legal action for the recovery of costs while the cost assessment process was in progress, because the result of both an action for recovery and the assessment process itself was a judgment of the court, in the latter case, a deemed judgment being created by filing of the costs assessor’s certificate, “the appropriate course is likely to be that one process is stayed pending the outcome of the other so that the possibility of inconsistent judgments is avoided”: at [45].

94. Barratt JA’s approach in Gilles was consistent with that taken in Branson v Tucker [2012] NSWCA 310 where the 2004 Legal Profession Act also arose to be considered, there in circumstances where another barrister was seeking to recover costs from a solicitor. His Honour explained the purpose of the costs assessment system which the current statutory regime continues, in terms apposite to what is here in issue:

1. the costs assessment process is no more than a means of quantification made available to the billing practitioner and the person billed, which they may resort to it if they chose, the objective being to provide an efficient method of objective quantification by experienced practitioners; to protect those upon whom lawyers impose charges; and to regulate the conduct of lawyers: at [127];

2. if advantage is taken of the procedure, the simple procedural step of filing the costs assessor's certificate in a court registry will be translated into a deemed judgment debt which will supersede or satisfy the parties’ contractual entitlement, so that there is no longer any possibility of an action in contract to recover the lawyer's fees: at [128];

3. if there is, for any reason, no quantification by means of the statutory assessment process, the costs can be dealt with in the same way as any other contractual claim: at [129]; and

4. the mere existence of the statutory assessment process does not preclude the deployment of the court's general jurisdiction in relation to costs. It is only when the statutory mechanism has been put into operation and has resulted in quantification, that the statutory mechanism has a bearing on the determination of the recoverable amount: at [131].

95. Those approaches are consistent with the conclusion I have reached, that the statutory scheme is not intended to have the draconian outcome for which Ms Ramsay and Mr Conolly contended.

96. Namely, that an application for assessment of legal costs, even when brought out of time so that the costs cannot be assessed in accordance with the statutory regime and then recovered by way of a deemed judgment created by the filing of the costs assessor’s certificate, has the result that the costs also cannot be pursued by way of proceedings brought in the normal way, as s 194 of the Uniform Law provides for.

97. Such a conclusion would be inconsistent with the statutory objective of proportionate regulation of the legal profession, depriving practitioners as it would of any payment for the work they had performed. That is not what the legislative scheme contemplates or provides for.

The evidence

98. In evidence is:

1. the three out of time invoices;

2. the 28 November 2018 letter from the Manager, Costs Assessment in relation to the disputed Bartlett invoice, advising Ms Gatland that her application was out of time and thus could not proceed to costs assessment. Further, that it could not be referred to a costs assessor, given the provisions of s 198(4) of the Uniform Law, which did not permit a law practice to seek an extension, with the result that steps would be taken to close the file;

3. the costs assessor’s February 2019 certificate of determination of the two Bespoke invoices, together with the statement of reasons which explained why the costs assessor concluded that the application had been made within time. There is no suggestion in the Local Court or on this appeal, that the costs assessor was correct in those conclusions; and

4. the review panel’s April 2020 certificate of determination and its statement of reasons for having concluded that the application in relation to the disputed invoices had been made outside the time limit imposed by s 198 of the Uniform Law. That certificate thus reflected only the costs of the other five invoices which the review panel agreed had been correctly assessed by the costs assessor. There was no suggestion on this appeal, that the review panel was wrong in its decision.

The statutory regime did not preclude Ms Gatland’s application to the Local Court

99. On this evidence, given the statutory scheme I have explained, the case advanced for Ms Ramsay and Mr Conolly that both the letter from the Manager, Costs Assessment refusing to accept the Bartlett application and the review panel’s certificate in relation to the Bespoke application, evidenced a costs determination to which s 73 of the Application Act attaches, cannot be accepted.

100. The evidence establishes that the out of time applications Ms Gatland made in relation to the Bespoke invoice and the two Bartlett invoices could neither result in either an assessment of those costs conducted under the statutory regime, or a costs determination to which s 73 of the Application Act applied.

101. It also establishes that no costs determination or certificate which evidenced such a determination was brought into existence in relation to the Bespoke invoice. That is because the Manager, Costs Assessment did not have or purport to exercise the statutory function of undertaking a costs assessment, making a costs determination, or issuing a certificate evidencing such a determination.

102. In the case of the Bartlett invoices the evidence establishes that the review panel disagreed with the conclusion which the costs assessor reached on the question of whether the application in respect of those invoices had been made within time. The result was that the review panel set aside the costs assessor’s determination and substituted its own. In doing so, because it concluded that the application had been brought out of time, it did not assess those costs in accordance with the statutory regime. The result was that its costs determination and the certificate which evidenced it, was confined to the assessment of the application which Ms Gatland made within time, in respect of the other five Bartlett invoices.

103. There was thus also no costs determination in relation to the out of time Bartlett invoices nor any certificate which evidenced such a determination brought into existence, to which s 73 could attach.

104. I am thus satisfied that Atkinson LCM was correct in concluding that Ms Gatland was not prevented by s 73 of the Application Act from seeking to recover her unpaid costs under the three disputed out of time invoices in the Local Court. Those proceedings were within the legislative contemplation, given the provisions of ss 194 and 198 of the Uniform Law and not precluded by s 73 of the Application Act.

105. Neither the Application Act nor the Uniform Law contemplate that when an application for costs assessment cannot be received, entertained or made because the 12-month limitation period has passed, that a party to a costs agreement who has been provided with legal services is thereby relieved from the contractual obligation to pay for those services.

106. Instead, what the statutory regime contemplates in such a case is that the client even then may make an application, out of time, to have those costs assessed. If recovery proceedings have been brought in a court and such leave is sought and given, that may result in a stay of those proceedings while the costs assessment is undertaken. But Ms Ramsay and Mr Conolly did not make such an application and so Ms Gatland was entitled to pursue the Local Court proceedings as she did.

107. The legislative scheme permitted such recovery of the unpaid costs to be pursued by Ms Gatland against Ms Ramsay and Mr Conolly.

Abuse of process

108. It follows that the case Ms Ramsay and Mr Conolly advanced in relation to abuse of process also cannot succeed.

109. As they accepted, that depends on it being established that there is a risk of re-litigation, the same question as raised in the Local Court having already been disposed of in the assessment process: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [33].

110. That was not established.

111. The fairness and reasonableness of the out of time costs were wrongly assessed by the costs assessor, with the result that the costs assessor’s determination and certificate were later set aside and substituted by the determination and certificate of the review panel. It concluded that the costs could not be assessed under the statutory scheme.

112. In the result, in the Local Court where Ms Gatland was pursuing payment of the unpaid costs, she was not seeking to re-litigate anew a case which had already been disposed of in the assessment.

113. The disputed recovery of the unpaid costs properly fell to the Local Court to determine, that not being a matter which could have been determined in the assessment process, given that the application for assessment was time barred: UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45 at [39] and [111].

Estoppel

114. Nor did an estoppel arise, although that was finally but faintly argued.

115. It was submitted that Ms Gatland should have ensured that her costs assessment applications were within time, the limitation period being a matter of substantive law and easy for a legal practitioner to determine.

116. But whatever the reason for an application having been made out of time, the statutory scheme does not permit out of time applications to be assessed, except with an extension of time which only Ms Ramsay and Mr Conolly could have sought. But they did not.

117. That the result of the dispute over the construction of s 198(7) of the Uniform Law, which imposed the time limit before the costs assessor was Ms Ramsay and Mr Conolly’s successful application to the review panel, did not have the result that Ms Gatland’s unpaid costs could neither be assessed under the statutory scheme, nor pursued in the Local Court.

118. In those circumstances Ms Gatland was entitled to pursue the costs Ms Ramsay and Mr Conolly still refused to pay, in the usual way in a court of competent jurisdiction, so long as they were pursued within other applicable limitation periods.

119. The result of the review panel’s decision that the application was time barred and Ms Ramsay and Mr Conolly’s decision not to seek an extension of time for the costs assessment, thus could not estop the pursuit of those costs in the Local Court.

Orders

120. For these reasons I am satisfied that the appeal must be dismissed. I order accordingly.

121. The usual costs order under the Uniform Civil Procedure Rules 2005 (NSW) is that they follow the event. In this case that is an order that Ms Ramsay and Mr Conolly pay Ms Gatland’s costs, as agreed or assessed.

122. I understand that Ms Gatland may wish to be heard on the costs order. If she does not, I will make the usual order. If she does, she should approach.

123. In that event, within seven days Ms Gatland should file and serve the orders which she seeks, together with short submissions. Within a further seven days Ms Ramsay and Mr Conolly should file and serve their short submissions and the parties should then indicate whether they wish further to be heard.

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Decision last updated: 07 November 2022