Reavill Farm Pty Ltd v Burrell Solicitors Pty Ltd

[2017] NSWCA 156

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Reavill Farm Pty Ltd v Burrell Solicitors Pty Ltd [2017] NSWCA 156

Hearing dates:

31 March 2017

Date of orders:

28 June 2017

Decision date:

28 June 2017

Before:

Bathurst CJ at [1];
Leeming JA and Emmett AJA at [8]

Decision:

In proceedings 2016/121807 (the Liability Appeal):
(1) The amended notice of appeal filed on 1 December 2016 be dismissed.
(2) The appellant pay the respondent’s costs of the appeal.

 In proceedings 2017/55149 (the Costs Appeal):
(1) An extension of time to file the summons is refused.
(2) The applicant pay the respondent’s costs of the summons.

Catchwords:

TRADE AND COMMERCE – Trade Practices Act 1974 (Cth) and related legislation – Australian Consumer Law – Consumer protection – Misleading and deceptive conduct – Causation – whether appellant suffered loss or damage as a result of respondent’s impugned conduct – whether respondent’s failure to provide updated reasonable costs estimates was a cause of appellant’s loss or damage – whether appellants relied on unreasonable costs estimates to their detriment – whether work performed by respondents was wholly wasted

 

APPEAL AND NEW TRIAL - Appeal - General principles – whether appellant was denied procedural fairness – whether question of extent to which work performed by respondents was wasted was properly raised by respondents before primary judge

 

COSTS – Costs assessment – Determination – Appeal – extension of time to appeal from determination of costs review panel – whether appeal would prolong the substantive dispute between the parties

 

COSTS – Costs assessment – Determination – Appeal – whether appellant denied procedural fairness – whether costs assessor relied on adverse material without giving appellant the opportunity to comment – whether a denial of procedural fairness is a ‘decision’ as to a ‘matter of law arising in the proceedings’ pursuant to s 384 of the Legal Profession Act 2004 (NSW)

COSTS – Costs assessment – Determination – Appeal – whether costs assessor erred in the exercise of discretion under s 317(4) of the Legal Profession Act 2004 (NSW) – whether discount failed to reflect the magnitude of respondent’s failure in its legal obligations

Legislation Cited:

Civil Liability Act 2002 (NSW), s 5D(3)
Competition and Consumer Act 2010 (Cth), Schedule 2, Australian Consumer Law, s 18
Environmental Planning and Assessment Act 1979 (NSW), Pt 3A
Fair Trading Act 1987 (NSW), s 42
Land and Environment Court Act 1979 (NSW), s 34
Legal Profession Act 2004 (NSW), ss 317, 351, 375, 384, Div 11 Pt 3.2
Supreme Court Act 1970 (NSW), s 69
Trade Practices Act 1974 (Cth), s 52
Uniform Civil Procedure Rules 2005 (NSW), r 50

Cases Cited:

Adamson v Miller [2005] NSWSC 971
Adelaide Bank Ltd v Phontos [2016] FCA 824
Burrell Solicitors Pty Ltd v Reavill Farm Pty Ltd [2016] NSWSC 303
DCL Constructions Pty Ltd v Di Lizio [2007] NSWSC 1180
Doyle v Hall Chadwick [2007] NSWCA 159
Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479
Griffith v Australian Broadcasting Corporation [2013] NSWSC 750
Henville v Walker (2001) 206 CLR 459; [2001] HCA 52
Hogarth v Gye [2002] NSWSC 32
House v The King (1936) 55 CLR 499; [1936] HCA 40
I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109; [2002] HCA 41
Jingalong Pty Ltd v Todd [2014] NSWCA 330
Kostas v HIA Insurance Services Pty Ltd (2010) 241
CLR 390; [2010] HCA 32
Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381; [2002] NSWCA 288
Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; [2004] HCA 3
Nadinic v Drinkwater [2017] NSWCA 114
Re Refugee Tribunal; Ex Parte Aala (2000) 204 CLR 82; [2000] HCA 57
Tomko v Palasty (No 2) (2007) 71 NSWLR 61; [2007] NSWCA 369
Travel Compensation Fund v Tambree (2005) 224 CLR 627; [2005] HCA 69
Zepinic v Chateau Constructions (Australia) Ltd (No 2) [2013] NSWCA 227

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Reavill Farm Pty Ltd (First Appellant)
Champions Quarry Pty Ltd (Second Appellant)
Jeffrey Francis Champion (Third Appellant)
Diana Christine Champion (Fourth Appellant)
Macabil Pty Ltd (Fifth Appellant)
Burrell Solicitors Pty Ltd (First Respondent)
John Llewellyn Burrell (Second Respondent)

Representation:

Counsel:
R Cheney SC with V McWilliam (Appellants)
A J McInerney SC with L T Livingston (Respondents)

  Solicitors:
Resolve Litigation Lawyers (Appellants)
BS Legal t/as Burrell Solicitors ILP (Respondents)

File Number(s):

2016/121807; 2017/55149

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales;Costs Review Panel

Jurisdiction:

Equity;-

Citation:

[2016] NSWSC 303;
-

Date of Decision:

24 March 2016;
11 April 2013

Before:

White J;Mr Stephen Lancken and Mr John Sharpe

File Number(s):

2011/365912;
360984/2011

Judgment

Bathurst CJ.……………………………………………………………………	[1]
Leeming JA and Emmett AJA.………………………………………………..	[8]
Introduction……………………………………………………………......	[8]
The Proposed Development.…………………………………..............	[13]
The L&E Court Proceedings………………………………………...…..	[20]
The Liability Proceedings………………………………………………..	[75]
Conclusions of the primary judge……………………………………….	[79]
The Liability Appeal……………………………………………………....	[94]
Ground (1): Causation……………………………………………….....	[98]
Ground (2): Costs not wasted………………………………………....	[181]
Ground (3): Procedural Fairness………………………………………	[196]
The Costs appeal………………………………………………………..	[226]
Extension of Time……………………………………………………….	[230]
Ground (1): Denial of procedural fairness…………………………....	[257]
Ground (2): Absence of Determination of Liability…………………..	[267]
Grounds (3) and (4): Wrong exercise of discretion………………….	[272]
Ground (5): Misconstruing the evidence……………………………..	[282]
Conclusion………………………………………………………….........	[285]

1. BATHURST CJ: I have had the advantage of reading the judgment of Leeming JA and Emmett AJA in draft. I agree with the orders proposed by their Honours and with their Honours’ reasons. I would only add the following remarks on Ground 1 of the Grounds of Appeal, which I do not believe are in any way inconsistent with their Honours’ reasons. For convenience, I have used the same abbreviations as those used by their Honours.

2. For the Champion parties to succeed, it was necessary for them to demonstrate that loss or damage was caused by the misleading and deceptive conduct of Burrell Solicitors. That conduct involved giving a misleading estimate of the costs of the Land and Environment Court proceedings and an ongoing failure to provide an accurate estimate until December 2010. These findings were not disputed on the appeal, nor was the finding of the primary judge that Mr Burrell knew his initial estimate was not reasonable.

3. It is also correct, as Leeming JA and Emmett AJA have pointed out, that had the Champion parties been given an estimate of costs of $1.5 million (the costs ultimately incurred by them in prosecuting the L&E proceedings), they would not have commenced the proceedings and if they had been given such an estimate in late May or early June 2010, they would have taken steps to limit the costs.

4. However, it remained necessary for the Champion parties to show that they suffered loss by the misleading and deceptive conduct. That issue of causation is determined in order to give effect, in the circumstances of the particular case, to a statute with a purpose of promoting fair trading and protecting consumers against such conduct: Henville v Walker (2001) 206 CLR 459; [2001] HCA 52 at [96]; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109; [2002] HCA 41 at [26]; Travel Compensation Fund v Tambree (2005) 224 CLR 627; [2005] HCA 69 at [30], [45]; Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; [2004] HCA 3 at [44]-[45].

5. In the present case it seems to me that the Champion parties, as a result of the misrepresentations, embarked on and continued proceedings at a greater risk of costs than they were led to believe: Murphy v Overton supra at [54]. However, the difficulty is that they have not established a different course would have been adopted had they been supplied with a reasonable costs estimate, either at the outset of the proceedings or at what was described as the “watershed”, being the non-disclosure of estimated costs at the time the s 34 conference was vacated (see judgment of Leeming JA and Emmett AJA at [166]). No evidence of what was a reasonable estimate of those costs at either time was adduced. In the circumstances, there was nothing to suggest that the provision of such an estimate would have caused the Champion parties to adopt a different course. This is particularly so in the context where the evidence established that the Champion parties regarded the L&E proceedings of critical importance to the object of expanding the quarry (see in particular the findings of the primary judge referred to at [84]-[86] of the judgment of Leeming JA and Emmett AJA).

6. Nor do I consider that the Champion parties established that they would have adopted a different course had there been an earlier disclosure of costs incurred after the “watershed” moment. Leeming JA and Emmett AJA have summarised Mr Champion’s close involvement in the litigation from May 2010, and his knowledge of the costs which were being incurred (Leeming JA and Emmett AJA at [174]-[176]). In these circumstances it could not be said that the disclosure of such costs would have caused Mr Champion to adopt a different course.

7. In these circumstances Ground 1 has not been established. This is in no way to condone the conduct of Burrell Solicitors which, having regard to the unchallenged findings of the primary judge was, to say the least, unprofessional. Nonetheless, the Champion parties have failed to prove they suffered damage as a result of such conduct.

8. LEEMING JA and EMMETT AJA:

Introduction

There are two appeals before the Court. Both appeals are concerned with legal costs charged by Burrell Solicitors Pty Ltd (Burrell Solicitors) in connection with proceedings in the Land and Environment Court (the L&E Court).

9. The first appeal (the Liability Appeal) is brought by Reavill Farm Pty Ltd (Reavill Farm), Champions Quarry Pty Ltd (Champions Quarry), Mr Jeffrey Champion and Mrs Diana Champion (together the Champion parties) from orders made by a judge of the Equity Division (the primary judge) in proceedings originally brought by Burrell Solicitors in the Equity Division (the Liability Proceedings). The claims made by Burrell Solicitors in the Liability Proceedings were eventually discontinued. However, in a cross-claim, the Champion parties claimed that they suffered loss and damage as a consequence of misleading and deceptive conduct engaged in by Burrell Solicitors and Mr John Burrell (together the Burrell parties). Mr Champion is the principal of Champions Quarry. Mr and Mrs Champion are together the principals of Reavill Farm. Mr Burrell, a solicitor, is the principal of Burrell Solicitors.

10. The Champion parties sought damages from the Burrell parties in connection with the provision of costs estimates given to the Champion parties in relation to in two sets of proceedings in the L&E Court (the L&E Court proceedings). The primary judge held that the conduct of the Burrell parties about which the Champion parties complained contravened the Legal Profession Act 2004 (NSW) (the Legal Profession Act), and was misleading and deceptive in contravention of the Fair Trading Act 1987 (NSW) (the Fair Trading Act) and the Trade Practices Act 1974 (Cth) (the Trade Practices Act), and the Australian Consumer Law (the ACL), to the extent that the conduct continued past 1 January 2011. However, his Honour concluded that no loss or damage was suffered by the Champion parties as a consequence of the conduct.

11. A costs assessor determined under the Legal Profession Act that the Champion parties were liable to pay Burrell Solicitors sums of $185,400.86 for counsel’s fees and $345,832.37 for professional costs and other disbursements in connection with the L&E Court proceedings. On appeal from the costs assessor’s determinations the Costs Review Panel confirmed the determinations by the costs assessor. The second appeal (the Costs Appeal) is brought by the Champion parties from the costs determinations in favour of Burrell Solicitors made by the Costs Review Panel. The Costs Appeal was originally brought in the District Court but was removed into this Court by consent in order to ensure that all issues between the same parties be resolved as efficiently as possible.

12. On 22 August 2013, in consequence of the determinations of the Costs Review Panel, judgment was entered against the Champion parties in favour of Burrell Solicitors in the Supreme Court in amounts of $188,005.11 and $349,302.42. Those judgments are presently stayed pending the disposition of the Liability Appeal.

The Proposed Development

13. Prior to 2008, Champions Quarry had been granted development consent by Lismore City Council (the Council) for the extraction or production of sandstone from a quarry on its land. The land surrounding the quarry is used primarily for agricultural and rural purposes, being cattle grazing, pasture production and some cropping. There are also several rural dwellings on smaller allotments within close proximity to the quarry.

14. In May 2008, Champions Quarry submitted Development Application 2008/233 to the Council seeking development consent to expand the existing sandstone quarry (the Quarry Expansion DA). The Quarry Expansion DA was supported by an environmental impact statement (the 2008 EIS). The Champion parties retained Environmental Resources Management Australia (ERM) as its principal consultant for preparation of the 2008 EIS as well as a revised EIS.

15. On 10 February 2009, the Council refused the Quarry Expansion DA. In the Council’s notice to Champions Quarry, it gave 11 grounds for refusing the Quarry Expansion DA, which may be summarised as follows:

1.   The development does not comply with the prescribed buffers and will create land use conflicts.

2.   The development is inconsistent with the relevant zone objectives.

3.   The traffic impacts are very significant and will have an unacceptable impact on the road network over the life of the quarry.

4.   The development will generate unacceptable levels of noise and there is no consideration of the noise and vibration impacts on nearby fauna.

5.   The development will generate unacceptable levels of dust that pose health risks to adjoining residences and fauna.

6.   The development may have impacts on flora and fauna and there has been insufficient investigation to determine the level of impact.

7.   The development will have unacceptable impacts on water systems and soil stability and there is an inadequate rehabilitation plan.

8.   Visual impacts will be significant and unacceptable.

9.   The development may negatively impact on aboriginal sites of archaeological and cultural significance.

10.   The application does not address the economic impacts on eco tourist businesses.

11.   The development cannot be held to comply with the public interest.

16. On 6 April 2009, Reavill Farm and another company controlled by Mr Champion submitted an application for the approval, by the Minister for Planning (the Minister) pursuant to Part 3A of the Environmental Planning and Assessment Act 1979 (NSW) (the Planning Act), of the expansion of the quarry (the Part 3A Application). [1] Part 3A applies to the carrying out of development that is declared under s 75B of the Planning Act to be a project to which Part 3A applies. Under s 75B(2) the kinds of development that may be declared to be a project to which Part 3A applies include major infrastructure or other development that, in the opinion of the Minister, is of State or regional environmental planning significance. Section 75D of the Planning Act then provides that a person is not to carry out development that is a project to which Part 3A applies unless the Minister has approved of the carrying out of the project under Part 3A. Under s 75E, an application for approval must describe the project and contain any other material required by the Director-General. Section 75F contemplates that the Minister may publish guidelines with respect to environmental assessment requirements for the purpose of the Minister approving projects under Part 3A. Section 75H requires a proponent to submit to the Director-General the environmental assessment required under those provisions for approval to carry out the project. The Director-General may require a proponent to submit a revised environmental assessment to address matters notified to the proponent. The Part 3A Application was supported by an environmental assessment report (the 3A Environmental Report) prepared by ERM.

    1. Part 3A of the Planning Act was repealed in 2011 by the Environmental Planning and Assessment Amendment (Part 3A Repeal) Act 2011 (NSW).

17. The expansion that was proposed in the Part 3A Application differed in several respects from the expansion that was proposed in the Quarry Expansion DA. As will become apparent, some significance is attached to the difference between the proposals that were the subject of the Quarry Expansion DA, on the one hand, and the proposals that were the subject of the Part 3A Application, on the other hand.

18. The Quarry Expansion DA sought consent to expand the existing sandstone quarry to increase the annual rate of extraction of sandstone from 29,000 cubic metres per annum, being approximately 64,000 tonnes per annum, to an average of 200,000 tonnes per annum, up to a maximum of 5 million tonnes for the 25 year life of the quarry. It also involved a boundary adjustment of six existing rural allotments. The 2008 EIS stated that the quarry would operate in a hierarchical manner, providing a 40 hectare operational area in which there would be three extraction areas. The proposal included a northern extraction area, to the north of the existing quarry, as well as a southern extraction area.

19. The initial Part 3A Application submitted in April 2009 sought approval for expansion of the existing quarry to allow for extraction and processing of 250,000 tonnes per annum, together with a boundary adjustment and re-subdivision. The Part 3A Application stated that the existing quarry had approval allowing for extraction of up to 29,000 cubic metres (64,000 tonnes) per annum from a total approved resource of 130,000 cubic metres. It stated that a significant resource of approximately 12 million tonnes had been identified on land owned by the proponents, of which it was proposed to extract 6.25 million tonnes at the rate of 250,000 tonnes per year, over a 25 year period. It was also proposed to expand the materials processing capacity of the quarry to accommodate that increased extraction rate. The increased expansion was to occur primarily in a new extraction area to the south of the existing quarry and the existing quarry pit was to become a processing area to allow for a sand washing plant and the establishment of materials storage and processing facilities, plant, storage and maintenance facilities and a building containing an office and staff amenities.

The L&E Court Proceedings

20. The Champion parties approached Burrell Solicitors in connection with a proposed appeal to the L&E Court from the refusal of the Quarry Expansion DA. On 2 February 2010, Mr Burrell wrote to the Champion parties as principal and director of Burrell Solicitors, noting that Burrell Solicitors was instructed to carry out work as follows:

• commence and conduct proceedings in the L&E Court;

• assist in any negotiations with the Council;

• liaise as instructed with the Department of Planning (the Department);

• advise generally;

• engage counsel as instructed; and

• liaise with Mr Michael Young, a solicitor based in Ballina who helped with aspects of the relevant development application.

21. In his letter, MrBurrell estimated that Burrell Solicitors’ professional fees, excluding disbursements, could range between $8,500 and $10,500 plus GST, assuming a hearing of three days. That figure did not include barrister’s fees. The letter said that MrBurrell would appear as advocate and that no barrister was required unless a complex issue of law or fact arose, or Mr Champion instructed otherwise, at which time MrBurrell would advise of the estimated fees of the barrister. The letter also said that actual costs could exceed the estimate if the scope of the matter or its complexity increased for reasons outside the present knowledge or control of Burrell Solicitors. Mr Burrell said that $2,610 for any extra day of hearing should be allowed and that $1,000 should be allowed for disbursements.

22. MrBurrell’s letter said that the estimate did not include any filing fees or witness costs and that expert witnesses could include a surveyor and environmental consultant. The letter set out an hourly rate for MrBurrell as principal of Burrell Solicitors and for an employed solicitor or associate. The letter said that the estimate was only a broad one and not a firm price.

23. On 2 February 2010, the Champion parties retained Burrell Solicitors to commence and conduct proceedings in the L&E Court by way of appeal against the refusal by the Council of the Quarry Expansion DA. Pursuant to that retainer,    proceedings were commenced in the L&E Court on 9 February 2010 in respect of the refusal by the Council of the Quarry Expansion DA (the Quarry Expansion proceedings).

24. Before late 2008, Reavill Farm began constructing a number of earth mounds near the existing quarry in the vicinity of a neighbouring property owned by Mr and Mrs Woolleys. Initially, two earthen bunds were constructed on the land belonging to Champions Quarry between Mr and Mrs Woolleys’ residence and the quarry. Without development consent, Champions Quarry caused an additional bund to be constructed between the two existing earthen bunds to address acoustic impact from noise caused by the quarry directed towards Mr and Mrs Woolleys’ residence. In late 2008, the Council’s officers instructed Champions Quarry to cease work with respect to the construction of the earth mounds in the vicinity of Mr and Mrs Woolleys’ property.

25. On 18 March 2010, Reavill Farm and Mr and Mrs Champion retained Burrell Solicitors to commence and conduct an appeal in the L&E Court (the Woolley Bund proceedings) against the deemed refusal by the Council of Development Application 2005/999 under s 96 of the Planning Act. The application sought a modification of the conditions of the existing development consent in order to obtain retrospective approval for the erection of the earth and noise barrier near Mr and Mrs Woolleys’ residence (the Woolley Bund DA).

26. On 18 March 2010, Burrell Solicitors wrote to Mr and Mrs Champion and Reavill Farm confirming instructions to commence and conduct the Woolley Bund proceedings, to assist in any negotiations with the Council, to advise generally and to engage counsel as instructed. Burrell Solicitors estimated that its professional fees would be between $4,500 and $6,500 plus GST, assuming a one day hearing. The estimate did not include barrister’s fees. Burrell Solicitors said that Mr Burrell would appear as advocate and that no barrister would be required unless a complex issue of law or fact arose. The letter said that actual costs could exceed the estimate if the scope of the matter or its complexity increased for reasons outside the present knowledge or control of Burrell Solicitors. The letter said that an additional $2,610 should be allowed for any extra day of hearing and stated that the sum of $200 to $500 should be allowed for disbursements, which did not include filing fees or witness costs. The letter said that expert witnesses could include a surveyor and an environmental consultant.

27. Shortly after 15 March 2010, Mr Tim Robertson SC was briefed by Burrell Solicitors on behalf of Champions Quarry and Reavill Farm. On 25 March 2010 Mr Robertson provided a proposed costs agreement giving an estimate of costs of $84,000 plus GST, assuming a “six day case for the s 34 conference and no junior”.

28. The reference to a “s 34 conference” was a reference to s 34 of the Land and Environment Court Act 1979 (NSW) (the L&ECourt Act), which provides that, if proceedings such as the L&E Court proceedings are pending, the L&E Court Act may arrange a conciliation conference between the parties, presided over by a single commissioner of the L&E Court. If agreement is not reached, the parties can consent to the commissioner’s disposing of the proceedings following a hearing, whether held forthwith or later, or, with the consent of the parties, on the basis of what has occurred at the conciliation conference. Otherwise, if the parties do not consent to the commissioner’s disposing of the proceedings, the commissioner is required to make a report to the L&E Court, stating that the conciliation conference has been terminated and setting out what, in the commissioner’s view, are the issues in dispute between the parties. In the events that happened, a s 34 conference was proposed but subsequently abandoned. That matter is referred to below.

29. On 25 March 2010, Burrell Solicitors issued invoices to the Champion parties in respect of the L&E Court proceedings. The sum of $6,476.15 was charged in respect of the Quarry Expansion proceedings and $1,667.98 in respect of the Woolley Bund proceedings. [2] The invoices covered work by Burrell Solicitors up to 23 March 2010. It is significant that Burrell Solicitors had charged preparation costs for the Quarry Expansion proceedings of over $6,000 as at 23 March 2010 whereas its estimate allowed only the equivalent of one day’s preparation of less than $3,000 costs for the whole case. No complaint was made by the Champion parties at that time.

    2. Excluding a discount offer of 10%.

30. On 26 March 2010, Mr Burrell forwarded Mr Robertson’s costs agreement to Mr Champion, seeking his undertaking, on behalf of Champions Quarry, himself personally and Reavill Farm, that Mr Robertson’s invoices would be paid promptly and that sufficient money would be given to Burrell Solicitors in advance to be held in trust to cover the costs of any s 34 conference or hearing. The primary judge found that Mr Champion was advised by Mr Burrell that both sets of proceedings were likely to take six days, as estimated by Mr Robertson. His Honour considered that that was a reasonable estimate at that time. No revised estimate was provided. Mr Champion informed Mr Burrell that he could not pay the costs estimated by Mr Robertson until he sold two home units.

31. In late March or early April 2010, Mr Burrell and Mr Champion reached an oral understanding to the effect that the Champion parties would pay Burrell Solicitors at least $10,000 per month on account of solicitor’s fees, disbursements and out-of-pocket expenses plus all amounts invoiced by Mr Robertson for his fees. On 8 April 2010, Mr Champion told Mr Burrell in a telephone conversation that he was expecting to spend at least $120,000 in legal fees. The primary judge found that, in April 2010, Mr Champion assumed that the total costs for both of the L&E Court proceedings could be in the order of $120,000 to $150,000. Thus, it is clear that, by that time, Mr Champion knew that the estimates provided by Mr Burrell were hopelessly inadequate.

32. On 13 April 2010, the Council considered the application in relation to the Woolley Bund DA and determined to refuse the application. The Council also considered the question of s 94 contributions in the context of the Part 3A Application. Section 94 of the Planning Act permitted the Council to impose conditions on any consent to the expansion of the quarry, including conditions that required the Champions Quarry to pay to the Council contributions for the damage to roads caused by additional trucks.

33. On 19 April 2010, the Council wrote to the Department of Planning objecting to the proposal contained in the Part 3A Application and urging the Minister to refuse the Part 3A Application. The Council furnished 11 reasons in support of its opposition, which were identical to the reasons given by the Council in its notice of refusal of the Quarry Expansion DA.

34. In its letter of 19 April 2010 to the Minister, the Council also disputed the method of calculation utilised to determine contributions under s 94 of the Planning Act. In its letter, the Council referred to the formula used by it to calculate the contribution for heavy haulage, of $369,000 per kilometre, was based on the Council having to reconstruct the pavement at the end of its design life to ensure that an adequate pavement for the expected traffic was maintained in the future. The Council asserted that its costing incorporated the whole of the cost of replacing the road pavement due to damage occurring over the relevant time associated with heavy vehicle movements. The Council disputed the $50,000 costing used by Champions Quarry as the appropriate amount because it failed to account for the loss of pavement life and the associated cost of maintaining the pavement over the long term.

35. The Council submitted to the Department that, if the L&E Court granted consent, by upholding the appeal in the Quarry Expansion proceedings, and the Department also granted approval of the Part 3A Application, the Champion parties should not be permitted a choice of consents applying to the same land and activity. The Council indicated to the Department that it would provide copies of any revised conditions of consent to be submitted to the L&E Court as part of the Quarry Expansion proceedings.

36. The Council’s letter of 19 April 2010 referred to the Woolley bund, saying that the developer had undertaken works on the land that were the subject of the Part 3A Application otherwise than in accordance with the approval given by the Council and had erected an earth bund in an incorrect position. The Council referred to the application lodged to amend the Woolley Bund DA such that it conformed to the construction works. The Council said that the bund formed an integral part of the noise attenuation measures proposed for the major project and submitted that because of the prospective operation of the relevant provisions of the Planning Act, the Minister did not have the power to approve retrospectively works that had been unlawfully constructed.

37. On 21 April 2010, Mr Robertson advised that the 3A Environmental Report had to be brought into the Quarry Expansion proceedings and that that would require the Quarry Expansion proceedings to be “revamped”. He expressed the view that the case would be lost unless a noise reduction strategy could be found and that they were going “headlong into this case with nothing on the table for structured noise attenuation”.

38. Further invoices were issued by Burrell Solicitors on 29 May 2010 and 2 July 2010 for their professional costs and further invoices were issued for disbursements each month to the end of December 2010. The invoice of 29 May 2010 was for $14,756.01 [3] and was rendered in respect of the Woolley Bund proceedings. It covered the period from 23 March 2010 to 30 April 2010. Two invoices were rendered on 2 July 2010 in respect of the Woolley Bund proceedings. The first was for $22,462.37 for professional costs and disbursements. It covered the period from 31 March 2010 to 22 June 2010. A further invoice of $7,986 was rendered on 2 July 2010 for Mr Burrell’s attendance at the L&E Court on 23 and 24 June 2010 in connection with the Woolley Bund proceedings. No objection was raised by the Champion parties to the invoices in question. No further invoices, other than for counsel’s fees and disbursements, were provided from 2 July 2010 until January 2011. No updated estimate of costs was provided by Burrell Solicitors.

    3. Excluding a discount offer of 10%.

39. On 21 April 2010, Mr Burrell had a telephone conference call with representatives of the Council concerning the conduct of the proposed s 34 conference. They all agreed that the hearing would take three to four days. On the same day, Mr Burrell telephoned Mr Champion and confirmed instructions for ERM to proceed with extra work on noise abatement. Mr Champion requested that Mr Burrell include more on the rehabilitation plans. Mr Will Weir of ERM recommended that further materials be prepared and filed on visual mitigation issues.

40. On 22 April 2010, Mr Burrell spoke to a representative of the Council who agreed to allow the Champion parties to file an amended noise report and a quarry management plan. They agreed on a timetable and hearing dates of 24 and 25 June 2010. On the same day, a representative of the Council sent an email to Mr Burrell setting out the timetable and directions they had discussed, adding two additional fields where expert evidence was to be given, being air quality and planning, in addition to aboriginal heritage, visual and acoustic. Mr Champion also spoke to Mr Burrell by telephone informing him that the Council had requested access to the quarry land, indicating that flora and fauna was now an issue as well as the issues earlier identified. By consent the s 34 conference was set down to be held on 19 and 20 May 2010.

41. On 23 April 2010, the Council provided a further submission to the Department in respect of the Part 3A Application. The Council referred to the current Quarry Expansion proceedings in the L&E Court, which had been set down for a s 34 conference commencing on 19 May 2010. The Council said that if the L&E Court granted consent, it was likely that draft conditions that had been provided to the Department would be varied to address the views of the relevant experts, which may change from that which had been provided in the Council’s earlier submissions. The Council then said that, if the L&E Court granted consent and the Department also granted consent, the Council wished to ensure clarity on the preferred consent under which the future quarry operations would be undertaken. The Council said that it was important that the conditions of consent for both applications, if approved, should be consistent and that the proponent should not be able to operate under a choice of consent that applied to the same land and activity being undertaken. The Council said that it would provide the Department with copies of any revised conditions of consent submitted to the L&E Court.

42. On 23 April 2010, Mr Burrell reviewed the visual impact assessments in respect of the Quarry Expansion DA and the Part 3A Application. He spoke to Mr Champion, who instructed him “to offer to drop the northern zone”. Mr Champion confirmed that by email. Mr Burrell then had without prejudice discussions with a representative of the Council concerning the issue of costs if the Quarry Expansion DA was amended to delete the northern extraction area.

43. On 24 April 2010, Mr Burrell sent an email to the Council’s representative “to formally put you on notice of our position”. Mr Burrell said that some of the environmental assessment undertaken for and included in the 2008 EIS had been extended and elaborated on during the course of the Part 3A Application. He said that that applied not only to noise assessment but also ecology and other areas and that many of the EIS reports from April and May 2008 had been revamped and re-issued for the Part 3A Application dated November or December 2009. He said that the mitigation and management measures had been further developed and that the Champion parties wished to rely on that further work. The email then said that, although the Part 3A Application does not include the northern section, the further work and detail referred to was immediately apparent on comparing the two and that the Council was aware of the differences. He said that, in his assessment, the differences were relatively minor and did not present any significant change to the proposals. He said that they proposed to file and serve the material from the Part 3A Application and to rely on the reports it contained for the purpose of the L&E Court proceedings.

44. On 26 April 2010, Mr Burrell and Mr Champion had a telephone discussion in which Mr Champion said that the 2008 EIS splits the tonnages and volumes between the zones whereas the Part 3A Application does not. He said that, if they dropped the northern zone, they could still seek consent for 200,000 tonnes and that there was plenty of material in the southern pit. On the same day, Mr Champion sent an email to Mr Burrell saying that, if they were deleting the northern section, they needed to amend the amount for the southern section from 2.7 million tonnes to include what was being deleted from the northern section, being 1.862 million tonnes, giving 4.562 million tonnes total in the southern section. In a later email on the same day, Mr Champion said he had undertaken a comparison of the Quarry Expansion DA and the Pt 3A Application in connection with considering the proposal to delete the northern section from the Quarry Expansion proceedings, having regard to the different areas of the land that were the subject of the proposed quarry expansion in the Quarry Expansion DA and the Part 3A Application.

45. On 27 April 2010, Mr Burrell told Mr Champion that his fees were unknown but could be two or three times higher than the original estimates. On the same day, the Council’s solicitors sent an email to Mr Burrell pointing out that the Quarry Expansion proceedings in the L&E Court were concerned with the Quarry Expansion DA and not the Part 3A Application, and saying that leave of the L&E Court would be required if the Champion parties wished to rely on information that did not form part of the Quarry Expansion DA.

46. On the following day, the Council’s solicitors indicated in a telephone call to Mr Burrell, on a without prejudice basis, that, if the Champion parties wished to amend the Quarry Expansion DA, so as to bring it into alignment with the Part 3A Application, Council would not oppose the amendment provided its costs were paid under s 97B of the Planning Act. On the same day, Mr Robertson advised that all of the reports should be updated to bring the Quarry Expansion DA into line with the Part 3A Application. He also observed that s 34 does not cater for a contentious and fully contested matter because there was no transcript and no cross-examination. Mr Burrell relayed Mr Robertson’s comments to Mr Champion.

47. On 29 April 2010, Mr Burrell sent an email to the Council’s solicitors in response to their email of 27 April 2010. Mr Burrell said that s 39(3) of the L&E Court Act provided that fresh evidence or evidence in addition to or in substitution for the evidence given on the making of the decision may be given on the appeal. Mr Burrell said that the Council had had the Part 3A Application reports for some time and no allegation of prejudice had been raised about there being any material difference between the Part 3A Application reports and the Quarry Expansion DA reports.

48. Mr Burrell made a note of a telephone conversation with Mr Champion on 29 April 2010 recording that Mr Champion said that he had thought about it overnight and decided that, if Mr Robertson was not able to perform at his best and achieve the best outcome through a binding s 34 conference, he, Mr Champion, wanted to have a full adversarial hearing with cross-examination. Mr Champion did not accept that that file note was a true record of the conversation.

49. On 4 May 2010, the dates of 19 and 20 May 2010 for the s 34 conference in relation to the Quarry Expansion proceedings were vacated. The dates of 21 to 25 June 2010 were substituted. The vacation of the dates was caused by the failure of the Council to give 28 days’ notice to objectors.

21. On the same day, Mr Robertson sent an email to Mr Burrell, which was copied to Mr Champion, in which Mr Robertson expressed surprise that the matter had been set down for hearing without first retaining an anthropologist. He also said that a s 34 conference was not appropriate for hostile cross-examination, which would be necessary if he were to challenge anthropological evidence without an expert. Mr Robertson also expressed concern that the Champion parties had not prepared a document that set out how it was proposed to integrate the reports and design in relation to the Part 3A Application with the Quarry Expansion DA if that was to be done. He said that the Champion parties would not be permitted to depart from the case advanced by and the information contained in the 2008 EIS. He said that, if it were necessary to depart from the 2008 EIS, the Champion parties would pay a heavy price in costs and delays.

22. On 5 May 2010, Mr Champion made a record in his diary as follows:

Rebadge [3A Environmental Report] to statements of evidence re EIS and delete any ref to [3A Environmental Report] Part 3A.

That appears to be a reference to adapting the 3A Environmental Report as a substitute for the 2008 EIS.

52. Mr Champion accepted that he reviewed draft reports from the experts as they were provided to him. On 14 May 2010, he was sent a series of emails enclosing draft reports in various disciplines. On 18 May 2010, Mr Burrell caused reports from various experts to be filed in the registry of the L&E Court and to be served on the Council’s solicitors.

53. On 19 May 2010, Mr Burrell, Mr Robertson and Mr Champion spent the day mainly on the quarry land. Afterwards, Mr Robertson told Mr Burrell that, having seen the site and the latest report, in his opinion the Quarry Expansion DA as lodged and assessed by the Council was so lacking in detail that it could not possibly have been properly assessed and approved. Mr Burrell spoke to Mr Champion by telephone and relayed to him the opinion expressed by Mr Robertson.

54. On 20 May 2010, the solicitors for the Council wrote to Burrell Solicitors concerning the reports that had been served on 18 May 2010. The letter said that a preliminary review of the additional documentation indicated that the Champion parties were now proposing to amend the Quarry Expansion DA to include, among other matters, a further dam, a third haulage route and provision for bio-diversity offsets. The letter said that the updated management plan indicated a change in the staging of the development, with quarrying now proposed to occur within the northern cell between eight to 15 years from commencement. The letter asserted that, in many of the reports, it was unclear precisely what amendments had been made.

55. The letter of 20 May 2010 said that, should the Champion parties seek to amend the Quarry Expansion DA, there may be costs implications under s 97B of the Planning Act and that re-notification of the proposal may also be required, which would place the existing hearing dates in jeopardy. The letter said that, in the circumstances, the matter may no longer be appropriate for a s 34 conference. The letter also said that it was now considered necessary for the Council to prepare expert witness reports and that steps would shortly be taken to have the matter relisted for further directions, including the listing of the matter for case management. The letter said that the Council’s solicitors proposed to serve a draft statement of facts and contentions, which would not make reference to the additional information served on behalf of the Champion parties.

56. On 21 May 2010, Burrell Solicitors sent to Mr Champion by email a copy of the letter of 20 May 2010 from the Council’s solicitors. Mr Burrell suggested a telephone conference with Mr Robertson to discuss the matter. On the same day, Mr Burrell spoke to Mr Champion by telephone. Mr Champion said that he wanted Mr Burrell to revert back to the original proposal and “pull” any suggested amendment of deleting the northern zone. Mr Burrell said that the northern extraction area could not be deleted at that juncture without being penalised with a costs order.

57. On 25 May 2010, Mr Burrell sent an email to Mr Champion, informing him that he was meeting with Mr Robertson on the following day. He listed the matters that he intended to discuss with Mr Robertson. The matters included the following:

• update on anthropologist’s report;

• response to alleged amendments to the Quarry Expansion DA;

• whether changes such as advising of a possible third road route changes the Quarry Expansion DA and requires re-notification;

• the status of the evidence that the Council’s representatives claim the Court’s leave is needed to rely on;

• Council’s refusal to consider a response to the Champion parties’ updated reports; and

• the Council’s statement of facts and contentions and the response to that statement.

58. On 26 May 2010, Mr Burrell spoke to Mr Champion by telephone about discussions that he had with Mr Robertson. Mr Burrell said that both he and Mr Robertson were of the opinion that the Quarry Expansion DA was not a fully conceived proposal when it had been assessed and determined by the Council and that, in order to conduct the Quarry Expansion proceedings in the L&E Court, it would be necessary to amend parts of the Quarry Expansion DA. He said that the consequence of making such amendments was that the Champion partiers would have to pay costs to the Council. He advised that Mr Champion had four options, being:

• Discontinue the Quarry Expansion proceedings immediately, in which event the Champion parties would only be liable to pay the Council’s legal costs to the date of discontinuance.

• Formally amend the Quarry Expansion DA and be liable for costs thrown away which would not be limited to legal costs but would include costs dating back to when the Quarry Expansion DA was first lodged.

• Continue on with the s 34 conference without making any application to amend, which would involve relying on updated reports and whatever additional evidence that the L&E Court would allow.

• Pay an amount to the Council to obtain its consent to the amendments and to persuade the Council to cease its opposition to the additional evidence proposed on behalf of the Champion parties.

59. On the following day, 27 May 2010, Mr Burrell asked Mr Champion about s 94 contributions and said that going against a contribution plan would not be something that would ordinarily occur in a s 34 conference, where the parties were supposed to be making a genuine attempt to settle outstanding issues through conciliation. Mr Champion said he would think about the road contributions and would come back to Mr Burrell.

60. On 27 May 2010, Mr Champion informed Mr Burrell that he had considered the four options and had chosen the fourth. As Mr Robertson had advised, it was necessary for the amendments to incorporate the 3A Environmental Report.

61. On 3 June 2010, the L&E Court vacated the s 34 conciliation conference. Both of the L&E Court proceedings were listed for separate, fully contested hearings. The Woolley Bund proceedings were set down for hearing on 23 and 24 June 2010 and the Quarry Expansion proceedings were set down for hearing on 11 to 15 October 2010.

62. The primary judge accepted that the Quarry Expansion proceedings assumed a much greater dimension than Mr Burrell had contemplated. The Champion parties contend that this Court should draw the inference that, if at the time of abandonment of the s 34 conciliation procedure they been given an accurate estimate of the costs likely to be incurred by continuing with the Quarry Expansion proceedings, they would have abandoned the Quarry Expansion proceedings in the L&E Court and would have pursued the Part 3A Application only.

63. As at 3 June 2010, or shortly thereafter, the Champion parties had received invoices from Burrell Solicitors, Mr Robertson and ERM for amounts totalling $114,945.25. In addition, as at 7 July 2010, Champion parties had received additional invoices from Burrell Solicitors, Mr Robertson and ERM for amounts totalling $97,244.31.

64. On 22 June 2010, Mr Burrell informed Mr Champion in writing that, as a guide, the costs of the Woolley Bund proceedings would come to $30,000, allowing for a two-day hearing plus counsel’s fees estimated to be $30,000. He told Mr Champion that Mr Champion’s guess of $60,000 to $80,000 was “in the ball park”. His Honour found that the Champion parties were told in June that costs had blown out beyond Mr Champion’s budget of about $120,000. However, they were not given an indication of what level of costs were being incurred or what level of costs had been incurred

65. The Woolley Bund proceedings were heard on 23 and 24 June 2010 and the hearing was adjourned to 27 July 2010. The adjournment was necessitated because, during the course of preparatory activities for the hearing and during the hearing itself, the plan for the proposed modification to the Woolley bund was revised and further work was required to be undertaken by acoustic experts. The hearing was concluded on 27 July 2010 and, on 3 August 2010, Senior Commissioner Moore dismissed the Woolley Bund proceedings on the ground that the L&E Court did not have jurisdiction, because the modified development proposed would not be substantially the same as that for which approval had already been given.

66. By 30 August 2010, an updated EIS had been finalised to replace the 2008 EIS. The updated EIS was based on updated expert advice. Mr Champion agreed that, in respect of the need for an updated EIS, he followed the advice provided by Mr Robertson, knowing that, as advised by both Mr Robertson and Mr Burrell, it would be necessary for the Champion parties to pay costs to the Council under s 97B of the Planning Act. On 3 September 2010, orders were made by consent permitting the Quarry Development DA to be amended to address the matters dealt with in the updated EIS.

67. On 9 September 2010, Mr Champion sent an email to Mr Robertson. He said that, at that time, without any written updated costs estimates from Burrell Solicitors, he had to guess at the likely legal costs and of all expert reports and expert witnesses, apart from costs thrown away, and guessed a total of $400,000. There was no response from Mr Robertson to the email, either directly from Mr Robertson or through Burrell Solicitors. There was no updated written costs estimate from Burrell Solicitors.

68. The hearing of the Quarry Expansion proceedings commenced on 25 October 2010 and continued on 26 and 27 October 2010, dealing principally with the issues relating to the road contributions that should be required as a condition of approval. The Quarry Expansion proceedings were then adjourned to 27 and 28 January 2011 to complete the evidence as to road contributions, with a hearing on the other issues to commence on 2 February 2011.

69. On 9 September 2010, Mr Champion wrote directly to Mr Robertson, with a copy to Mr Burrell, saying that the Champion parties and the Council had “signed off on a binding Section 34 with an estimate of costs from you and [Mr Burrell] and others of approximately $150,000”. Mr Champion went on to say that, “since then it ha[d] developed into a fully contested case”, which was “likely, with all expert reports and legal costs, to involve costs of $400,000 plus”. Mr Champion assured Mr Robertson that payment to him would commence shortly and that Mr Champion was proposing to sell some properties to reduce debt to banks and to fund the proceedings.

70. On 14 December 2010, Mr Robertson sent an email to Mr Burrell, a copy of which was sent to Mr Champion. Mr Robertson said that senior counsel for the Council had “floated” with him the effect that a Part 3A approval would have on the Quarry Expansion proceedings and had asked him whether the Champion parties would withdraw the Quarry Expansion proceedings. Mr Robertson said that he replied that that might depend upon what was approved and whether the Council would seek costs if the Quarry Expansion proceedings were discontinued. He said in the email that he and counsel for the Council agreed to seek instructions.

71. Mr Champion replied to Mr Robertson on 16 December 2010, saying that the Champion parties could only await the outcome of the Part 3A Application and then decide. Mr Champion said that the s 94 contributions question was to be heard in late January 2011 and that that question was vitally important “to our cost of production and competitiveness” with quarries in adjoining areas. Mr Champion said that they would need to consider how they could ensure a positive outcome for either the Part 3A Application or the L&E Court appeal in respect of the s 94 contributions issue.

72. On 20 December 2010, Burrell Solicitors received a letter dated 15 December 2010 from the solicitors for the Council saying that they understood that the Champion parties were pursuing the Part 3A Application. The letter referred to the fact that the Part 3A Application concerned the same land that was the subject of the Quarry Expansion proceedings and enquired as to the intention of the Champion parties with respect to the future conduct of the Quarry Expansion proceedings in the event that the Department determined the Part 3A Application, either by way of approval or refusal, before the further hearing of the Quarry Expansion proceedings.

73. It is unclear what response was given to that letter. In any event, the hearing of the Quarry Expansion proceedings resumed on 27 and 28 January 2011 and was heard over a further eight days from 2 February 2011 to 11 February 2011. The hearing was further adjourned to 28 March 2011. On 19 April 2011, the L&E Court dismissed the Quarry Expansion proceedings.

74. The Part 3A Application was delegated by the Minister to the NSW Planning Assessment Commission (the Commission). On 30 August 2012, the Commission agreed with the Department’s recommendation that the proposal should be approved and accepted the Department’s recommended conditions. That included conditions as to s 94 contributions in accordance with the Council’s plan for s 94 contributions.

The Liability Proceedings

75. The Liability Proceedings were originally commenced by Burrell Solicitors making a claim against the Champion parties. That claim was ultimately discontinued. However, the Champion parties filed a cross-claim against the Burrell parties claiming damages in respect of contraventions of the Trade Practices Act and the Fair Trading Act.

76. The allegations made in the further amended statement of cross-claim filed on behalf of the Champion parties (the Statement of Cross-Claim) may relevantly be re-stated as follows:

6.   By agreements dated 2 February 2010 and 18 March 2010, the Champion parties retained Burrell Solicitors to:

(a)   commence and conduct the Quarry Expansion proceedings; and

(b)   commence and conduct the Woolley Bund proceedings.

7.   It was a term of the said retainer (the Retainer) that Burrell Solicitors would use alI due skill, care and diligence in advising on the costs of the proceedings and would make all due inquiry to ensure that the costs estimates provided were as accurate as possible.

8.   Burrell Solicitors owed to the Champion parties a duty to use all due skill, care and diligence in advising on the costs of the L&E Court proceedings and to ensure that the costs estimates provided were as accurate as possible.

9.   Pursuant to the Retainer, Burrell Solicitors agreed to commence and conduct the L&E Court proceedings on behalf of the Champion parties and provided estimates of amounts for reports by a surveyor and environmental consultant in respect of the Quarry Expansion proceedings and in respect of the Woolley Bund proceedings.

10.   At the time when these estimates were provided, Burrell Solicitors knew or ought to have known that they were not an accurate estimate of the costs of L&E Court proceedings.

11.   The estimates provided were in breach of the Retainer and in breach of the duty referred to in 8 above.

12.   In reliance on the estimates provided, the Champion parties instructed Burrell Solicitors to commence and conduct the L&E Court proceedings.

13.   Burrell Solicitors knew or ought to have known that the Champion parties were relying on the costs estimates.

14.   In further breach of the Retainer, Burrell Solicitors failed:

(a)   to provide the Champion parties with updated costs estimates;

(b)   to respond to requests by Champion parties for the timely rendering of fee invoices;

(c)   to provide the Champion parties with invoices in a timely manner, between 29 April 2010 and 31 December 2010;

(d)   to act in accordance with instructions given orally by Mr Champion on behalf of the Champion parties to take steps to terminate the proceedings.

15.   By reason of the breaches referred to above, the Champion parties were deprived of the opportunity to make an informed decision on an ongoing basis as to whether to continue the Quarry Expansion proceedings and to make an informed decision as to whether to continue the Woolley Bund proceedings.

16.   By reason of the matters alleged above, the Champion parties have suffered loss and damage.

77. In their defence, Burrell Solicitors and Mr Burrell admitted that Burrell Solicitors understood that, in relation to the Quarry Expansion proceedings, the Champion parties were relying upon the estimate as at 2 February 2010, subject to the qualifications contained in that estimate and that, in relation to the Woolley Bund proceedings, they were relying upon the estimate as at 18 March 2010, subject to the qualifications contained in that estimate.

78. The Champion parties alleged that they incurred costs in a sum in excess of $1.5 million and that costs of approximately $630,000 were incurred after 23 December 2010, being the date on which Mr Champion instructed Burrell Solicitors to pursue an opportunity to terminate the proceedings. They claimed that they suffered loss and damage to that extent because the costs incurred were of no value to them.

Conclusions of the primary judge

79. The primary judge concluded that there was not a reasonable basis for the costs estimates when they were provided to the Champion parties by Burrell Solicitors. Specifically, his Honour did not consider that Mr Burrell had a reasonable basis for the estimates that he made for the costs of the Quarry Expansion proceedings he set out in his letter of 2 February 2010. His Honour did not see how Mr Burrell could have believed that he could conduct the Quarry Expansion proceedings for a three day hearing at the cost he estimated on the basis of the hourly rates he proposed to charge. His Honour was satisfied that Mr Burrell did not believe that the matter would be completed after a three day hearing for a cost within the range he estimated.

80. Indeed, the primary judge found that, in February 2010, Burrell Solicitors was under financial pressure. Mr Burrell said that his tax debt had increased during 2010 to 2012 but that it had started “to bite” in 2010. His Honour considered that that provided a motivation for Mr Burrell to under-quote to attract the Champion parties as clients and his Honour was satisfied that that is what happened. His Honour also found that Mr Burrell did not attempt to identify a reasonable basis for his estimate of $4,500 to $6,500 plus GST on the basis that he would act as solicitor advocate in the Woolley Bund proceedings. His Honour concluded that there was none and that Mr Burrell was aware that that was not a reasonable estimate.

81. The primary judge held that the continued failure on the part of Burrell Solicitors to provide a fresh, reasonable estimate, when it was under a duty to do so, was a breach of contract and was misleading and deceptive conduct by omission. His Honour also held that that conduct induced, in the Champion parties, an incorrect assumption as to the likely legal costs of the L&E Court proceedings and that that incorrect assumption would have been corrected if fresh estimates, based on reasonable grounds, had been provided.

79. Mr Champion gave evidence that, shortly after 26 March 2010, Mr Burrell began talking about bringing in other experts. Mr Champion said that he allowed up to an extra $30,000 in his own mind as to the likely costs, being a total of about $150,000 inclusive of all legal costs and expert witnesses. He said that he proceeded on the basis that the total anticipated cost was approximately $120,000 and that at the most he might have expected to pay $150,000. The primary judge considered that an estimate of $120,000 to $150,000 for both proceedings would not have been unreasonable as at April 2010. However, his Honour referred to no evidence that supported a finding that such an amount would not have been unreasonable.

80. On 27 April 2010 Mr Burrell told Mr Champion that his fees were unknown but would be two or three times higher than the estimate. The primary judge did not consider that to say that the costs were, or could be, two or three times higher than the original estimate provided a proper estimate, as at the end of April 2010, of likely costs. By that time, his Honour said, it was apparent that the litigation would be substantial. His Honour held that Mr Burrell’s statement on 27 April 2010 that the costs could be two or three times more than he had previously estimated was itself an unreasonable assessment.

81. The primary judge found that at the latest, from the time when Mr Champion made his own estimate of $120,000 to $150,000, Mr Champion was not placing any continued reliance on Mr Burrell’s initial estimates. Further, his Honour was satisfied that, if reasonable estimates of the likely costs of both sets of proceedings had been given, the Champion parties would still have embarked upon the L&E Court proceedings. His Honour considered that that appeared from the events that followed and that, shortly after 18 March 2010, it must have been clear to the Champion parties that the estimates were hopelessly wrong, yet they continued with the litigation and the Retainer of Burrell Solicitors.

82. The primary judge concluded, in effect, that, although the Champion parties suffered financial loss as a result of the L&E Court proceedings, that loss was not caused by the initial unreasonable estimates of costs or the subsequent failure to provide updated reasonable estimates. His Honour considered that the Champion parties would have proceeded even if reasonable costs estimates were provided.

83. The primary judge referred to the contention on behalf of the Champion parties that Mr Burrell deprived them of the opportunity of discontinuing the Quarry Expansion proceedings on the basis of an agreement with the Council that there be no order as to costs or that costs be agreed in a reasonable amount. His Honour considered that there was no evidence that the Council would have been prepared to settle on terms that Mr Champion would have been prepared to accept. His Honour considered that the contemporaneous documents showed that Mr Champion was not prepared to settle the Quarry Expansion proceedings in the absence of a decision on the Part 3A Application and that he regarded the resumed hearing in January 2011 on the s 94 contributions issue as an important matter that he wanted resolved.

84. The primary judge found that a great deal of the costs of the L&E Court proceedings was incurred in obtaining expert reports from some 20 consultants, the majority of whom provided reports in their areas of expertise for use in both the Quarry Expansion proceedings and the Part 3A Application and, in some cases, also in the Woolley Bund proceedings. From about February 2010 until the completion of the Quarry Expansion proceedings, the 20 or so consultants who had been retained by the Champion parties were doing work in respect of the Quarry Expansion proceedings and the Woolley Bund proceedings as well as the Part 3A Application. While the tasks of the consultants were always separated, in most cases, consultants provided services in respect of each of the Part 3A Application, the Quarry Expansion proceedings and the Woolley Bund proceedings. His Honour held that, from 23 April 2010 at latest, the Quarry Expansion proceedings, and not the Part 3A Application, became the principal focus of the consideration of expert evidence, factual issues and legal submissions relevant to whether approval should be granted for the expanded quarry and, if so, on what conditions.

85. Between 26 March 2010 and 24 June 2011, ERM rendered accounts in respect of the L&E Court proceedings totalling $424,033.56. It also rendered accounts between 23 February 2010 and 23 September 2011 in connection with the Part 3A Application, totalling $126,299.43. The primary judge found that expert analysis was being substantially performed and invoiced in the Quarry Expansion proceedings, rather than the Part 3A Application. ERM sought and obtained submissions made by Mr Robertson in the L&E Court proceedings for use in connection with the Part 3A Application.

86. The primary judge held that the same issues that arose in the Quarry Expansion proceedings needed to be addressed for the purposes of the Part 3A Application. Those issues covered areas including aboriginal heritage, air quality, landscaping and visual impact, noise, quarry management, roads and traffic, soil and water and town planning. His Honour therefore did not consider that the work done by ERM in the Quarry Expansion proceedings was wholly wasted, notwithstanding that the Champion parties failed in the Quarry Expansion proceedings.

87. The primary judge also considered that, if the Champion parties had established that the misleading conduct of Burrell Solicitors and the breaches of contract found by him caused them to incur the continuing expenses of the Quarry Expansion proceedings, it would still have been incumbent upon the Champion parties to show to what extent those expenses were wasted. His Honour concluded that the work done, not only by the experts retained in the Quarry Expansion proceedings but also by Mr Burrell and Mr Robertson, was not without benefit to the Champion parties. His Honour held that they had not established to what extent those costs were wasted.

88. The primary judge held that Mr Burrell’s under-quotation of likely fees at the commencement of the Retainer was deliberate and did not accept that Mr Burrell’s failure to provide updated estimates was inadvertent. His Honour considered that the under-quotation and failure constituted a breach of the fundamental duty of loyalty that Burrell Solicitors owed to its clients. However, his Honour did not consider that it followed that the Champion parties were entitled to equitable compensation or other substantive relief. His Honour held that the amounts of the costs judgments entered against the Champion parties in consequence of the determination of the Costs Review Panel must be taken to represent fair and reasonable remuneration payable for the work actually done. His Honour concluded that the Champion parties were not entitled to equitable compensation for breach of fiduciary duty on the part of Burrell Solicitors.

89. The primary judge accepted that the Champion parties were induced in 2010 to adopt the assumption that the costs of the L&E Court proceedings, including expert witness costs, would total about $150,000 and that, after the case became a “fully contested case”, they assumed that the costs would be substantially more than that figure but nothing like the amounts they were charged. His Honour held that the Champion parties were induced to adopt that assumption by the failure on the part of Burrell Solicitors to provide reasonable, updated costs estimates. However, his Honour concluded that the Champion parties had not established that they acted to their detriment in reliance on the assumptions that they were induced to adopt as to the costs of the L&E Court proceedings.

90. The primary judge accepted that the Champion parties established that they relied on the assumptions that they adopted as to the likely costs, which should have been corrected by the provision of updated estimates. However, his Honour considered that the Champion parties would have pursued the L&E Court proceedings even if reasonable costs estimates had been provided and that, accordingly, they had not established that they acted to their detriment in reliance on the assumptions that they adopted as to the likely costs of the proceedings. Further, his Honour concluded, the Champion parties had not shown to what extent, if at all, the costs incurred in the L&E Court proceedings were not ultimately beneficial as contributing to the approval of the Part 3A Application. His Honour therefore concluded that the Champion parties were entitled to nominal damages from Burrell Solicitors for breach of contract but that their claims should be otherwise dismissed.

The Liability Appeal

94. In their amended notice of appeal filed on 1 December 2016, the Champion parties rely on three grounds. They may be shortly stated as follows:

1. The primary judge erred in finding that the lack of reasonable costs estimates was not a cause of the loss suffered by the Champion parties.

2. The primary judge erred in finding that no damage was suffered because the work done in connection with the L&E Court Proceedings was not wholly wasted.

3. In determining that no loss was suffered because the work was not wholly wasted and that expert analysis was being substantially performed and invoiced in the Quarry Expansion proceedings, the Champion parties were denied procedural fairness.

95. The second ground only arises if the Champion parties succeed on the first ground. That is to say, if the Champion parties establish that some part of the costs that were incurred would not have been incurred but for the breaches found by the primary judge, they contend that it was then incumbent upon Burrell Solicitors to establish that that part of the costs that would not have been incurred was of value to the Champion parties. If the Champion parties fail to establish that the costs would not have been incurred, Ground (2) does not arise. Similarly, Ground (3) would not arise. Further, if Ground (1) and Ground (2) each succeed, Ground (3) would not arise.

96. In many cases, a ground of appeal based on a denial of procedural fairness should be addressed first. [4] However, as was recognised both in the notice of appeal and the submissions made on behalf of the Champion parties, neither of those grounds could succeed if the Champion parties failed in their challenge to Ground (1). In particular, it was not suggested that any lack of procedural fairness impugned the principal basis on which the primary judge dismissed the claim, which was that the Champion parties had not shown that that they had suffered loss or damage “by” the contraventions of s 52 of the Trade Practices Act found by his Honour. It follows that it is appropriate to address Ground (1) first and, if Ground (1) fails, the appeal should be dismissed notwithstanding the force of the submissions of the Champion parties in relation to Grounds (2) and (3).

    4. See for example Nadinic v Drinkwater [2017] NSWCA 114 at [100].

97. The Champion parties challenge several findings of fact made by the primary judge. It is convenient to deal with the challenged findings and the findings contended for by the Champion parties, where they are relevant to grounds of appeal.

Ground (1): Causation

98. The Champion parties challenge several findings made by the primary judge in relation to the question of causation. It is convenient to say something about those findings before dealing with Ground (1).

Factual Findings

99. First, the Champion parties challenge the finding that, if reasonable estimates of the likely costs had been provided, they would still have embarked upon the L&E Court proceedings (the first finding). They contend that, if reasonable estimates had been provided, they would not have commenced the L&E Court proceedings at all. Alternatively, they say, they would have taken steps to limit the costs being incurred, such as making decisions on evidence and choice of counsel or would have discontinued the L&E Court proceedings. The Champion parties complain that no updated costs estimates were provided sufficiently in advance or at significant times during the course of the L&E Court proceedings to enable them to make timely and informed decisions, including as to the continuation of the L&E Court proceedings. Specifically, they say that, had reasonable estimates been provided as at 3 June 2010, when the s 34 conference was vacated, they would have discontinued the L&E Court proceedings, or, at least the Quarry Expansion proceedings.

100. Mr Champion asserted in his affidavit of 15 February 2012 (Mr Champion’s February 2012 affidavit) that, for many months after the L&E Court proceedings became “fully contested” (following the vacation of the s 34 conference on 3 June 2010) he repeatedly asked Mr Burrell how and why the L&E Court proceedings had ended up as “fully contested cases”. He asserted that it was not until 24 May 2011, after the L&E Court proceedings were completed, that Mr Burrell sent him an email explaining what had occurred in June 2010. Mr Champion asserted that, had he and Mrs Champion been informed of the possible or likely costs of a “fully contested case”, they would have had the opportunity to make an informed decision as to whether or not to proceed. He said that, on numerous occasions, as the L&E Court proceedings were escalating, he informed Mr Burrell that he could not afford additional and unknown costs. He asserted that, on several occasions, Mr Burrell informed him that they could not pull out of the case as they would have to pay the Council’s costs, backdated to the commencement of the assessment by the Council of the Quarry Expansion DA and all subsequent costs of the Quarry Expansion proceedings. Mr Champion said that Mr Burrell pointed out that the Council’s costs would be substantial but gave no indication of the likely costs of the Champion parties of continuing the L&E Court proceedings to completion.

101. Mr Champion asserted in his February 2012 affidavit that Mr Burrell led the Champion parties to believe that the L&E Court proceedings could be run from 1 May 2010 onwards for approximately $10,000 per month but provided no invoices until the end of December 2010 and then only for the period to 27 October 2010. Mr Champion asserted that costs paid to consultants and expert witnesses over and above the two consultants first listed by Mr Burrell (in his original estimate letter of 2 February 2010), being a surveyor and an environmental consultant, would not have been incurred. He asserted that no further updates on the number or disciplines of expert witnesses ultimately required were ever provided, let alone the extent of work and the projected costs of such expert witnesses.

102. Mrs Champion asserted in her affidavit of 15 February 2012 (Mrs Champion’s February affidavit) that she told Mr Burrell on many occasions not to agree to anything or do anything that would burden the Champion parties with more costs. In her affidavit of 21 November 2012 (Mrs Champion’s November affidavit) Mrs Champion said her first discussion with Mr Burrell in relation to the running of the proceedings occurred when he stayed at their house on the night of 14 March 2010, prior to a meeting with the Council on the following day. She said that Mr Burrell told her that “this is an easy case” and said that he was sure that the Council would agree to a s 34 binding mediation, and that that would be very simple and quick. She said that he told her “you have done all the work for the EIS, so our work has been done”. He told her that he had dealt with the Council’s solicitors before and that they were fine to deal with and the case would be over in six weeks. He told her that, in the L&E Court, no costs are awarded against a party who loses and that the only costs that can be awarded “are if you change your application from the original development application”. Mrs Champion said that she told Mr Burrell that they would just have to make sure that they did not change anything. Mrs Champion said that she had never been involved in proceedings in the L&E Court before and trusted that, with his experience, Mr Burrell was the expert and that he knew what he was doing.

103. Mrs Champion said in her November affidavit that, on about 30 April 2010 or 1 May 2010, Mr Champion told her that Mr Burrell had recently told him that the case could be run for $10,000 per month. At that stage, it was Mrs Champion’s understanding that the matter would be heard in June and she therefore calculated that a further $20,000 would be required. She asserted that at no stage during her involvement did Mr Burrell give any indication that the work that was being done from July 2010 to March 2011 was in excess of $10,000 per month. She was not informed by Mr Burrell that the proceedings might run for as long as they did.

104. Mrs Champion also asserted in her November affidavit that, had she been told by Mr Burrell that Burrell Solicitors was not going to charge $10,000 per month or that such a payment would be required for every month until the full hearing had been conducted, she would not have agreed to such a course. Mrs Champion asserted in her November affidavit that at no stage during her assistance with the preparation of the proceedings in the L&E Court did Mr Burrell give her any cause to believe that costs in excess of $10,000 per month were being incurred. She said that, if she had known the position to be otherwise in respect of the fees and disbursements being incurred, she would have withdrawn her instructions and taken steps with Mr Champion to settle the L&E Court proceedings without any further involvement of Mr Burrell.

105. Secondly, the Champion parties challenge the finding by the primary judge that the financial loss suffered by them was not caused by the unreasonable initial estimates of costs or the subsequent failure by Burrell Solicitors to provide updated reasonable estimates (the second finding). They say that it follows from their challenge to the first finding that their loss was caused by the unreasonable initial estimates and the subsequent failure to provide updated reasonable estimates. They assert that, by commencing and continuing the L&E Court proceedings in the manner that occurred, they acted to their detriment in reliance on assumptions as to the costs that they were induced to adopt by the conduct of the Burrell parties.

106. By way of response to the challenge to the first finding and the second finding, the Burrell parties point to several other findings made by the primary judge that are not challenged on the appeal. His Honour found that the Champion parties were aware soon after the estimates were provided that they were materially wrong. Therefore, it is said, they did not rely on the estimates in continuing to retain Burrell solicitors nor in retaining and continuing to retain counsel and incurring the costs of the L&E Court proceedings. [5]

     5. Burrell Solicitors Pty Ltd v Reavill Farm Pty Ltd [2016] NSWSC 303 at [6](d) (‘Burrell Solicitors v Reavill Farm’).

107. Next, the Burrell parties point to the finding by the primary judge that pursuit of the Woolley Bund proceedings was important for the Part 3A Application. The Council had made submissions to the Department that the Minister did not have power to approve, retrospectively, works such as the Woolley bund that had been constructed unlawfully. [6]

     6. Ibid at [70].

108. The Burrell parties also point to the finding by the primary judge that the Quarry Expansion proceedings assumed a much greater dimension than Mr Burrell had contemplated. His Honour found that, from 23 April 2010 at the latest, the Quarry Expansion proceedings and not the Part 3A Application became the principal focus of the consideration of expert evidence, factual issues and legal submissions relevant to whether approval should be granted for the expanded quarry and, if so, on what conditions. [7] Mr Robertson warned against agreeing to be bound by a Commissioner’s determination following a s 34 conciliation, because Mr Robertson considered that the evidence adduced at that time was inadequate. Further, the s 34 conference was abandoned because of the expansion by the Council of the areas on which it proposed to adduce expert evidence. [8]

     7. Ibid at [72].

     8. Ibid at [74].

232. The Champion parties contend, as a basis for the exercise of the discretion to extend the time, that the costs assessor and the Costs Review Panel erred in proceeding with their determinations notwithstanding that the question of the liability of the Champion parties to Burrell Solicitors was in issue in the proceedings before the primary judge and had not been determined. They contend that because a certificate can be filed so as to take effect as a judgment, in circumstances where there is a real dispute on substantial grounds as to whether any costs are payable, a costs assessor should not complete an assessment by issuing a certificate. That is to say, a certificate should not be issued by a costs assessor unless satisfied that the costs are payable. [23] In the present case, the costs assessor could not have been so satisfied, while the proceedings before the primary judge were still on foot.

     23. Doyle v Hall Chadwick [2007] NSWCA 159 at [61] per Hodgson JA (Mason P and Campbell JA agreeing) (‘Doyle v Hall Chadwick’).

233. Both the assessor and the Costs Review Panel proceeded with their determinations over the objection of the Champion parties on the basis that the assessments were subject to the proceedings before the primary judge. Further, the proceedings before the primary judge were conducted on that basis from no later than 28 February 2012, a time before the determinations were issued.

234. Judgments based on the determinations were entered in the Supreme Court without notice to the Champion parties on 22 August 2013. Once judgment was entered, the District Court had no power to set the judgments aside. The judgments could only be set aside in the Supreme Court. That was part of the relief sought by the Champion parties in their Statement of Cross-Claim in the proceedings before the primary judge.

235. The Champion parties contend that the delay is self-evident due to the existence of the proceedings before the primary judge. They assert that there would be no prejudice to Burrell Solicitors because Burrell Solicitors has always been a party to those proceedings, and so it has always been on notice that liability for the costs assessments was in dispute. The Champion parties also assert that the questions raised in the Costs Appeal are limited to questions of law and do not depend upon any recollections or availability of witnesses.

236. Burrell Solicitors characterises the delay in the commencement of the Costs Appeal as “extraordinary”, being more than three years following the receipt by the Champion parties of the decisions of the Costs Review Panel. It contends that there are no exceptional circumstances of the kind necessary to warrant an extension of more than three years. It points to the absence of any evidence on the part of the Champion parties explaining the reasons for the delay.

237. Further, Burrell Solicitors contend, even if it be the fact that the costs assessment and review process and the primary proceedings were conducted on the basis that the assessment of the entitlement of Burrell Solicitors to costs were subject to determination in due course in the primary proceedings, that is no explanation for the delay. It says the Champion parties could and ought to have commenced any appeal to the District Court within the time limit. It would have been open to them to ask the District Court to defer the hearing of the appeal pending the outcome of the primary proceedings in the Supreme Court. It would then have been a matter for the District Court to consider that application and the terms upon which the hearing might be deferred. The District Court would have had control of the management of the proceedings but, by choosing not to appeal, Burrell Solicitors asserts, the Champion parties denied it the opportunity of relying on the District Court to balance the competing interests of the parties as might have appeared appropriate to the District Court.

238. Burrell Solicitors points out that the date of entry of judgments in respect of the costs assessment, on 22 August 2013, was well after the period for appeal had lapsed, namely, 19 July 2013. In any event, the entry of judgment in respect of the costs did not prevent the Champion parties from commencing appeal proceedings in the District Court. A judgment that arises from the registration of a certificate under s 368(5) of the Legal Profession Act can be successfully challenged if the certificate on which it was based is set aside or varied. [24] While the registration of a certificate of determination makes the certificate enforceable as a judgment, it is no more than a ministerial act and does not make it a judgment of the court. [25] If an appeal had been commenced within time, it would have been a matter for the District Court to determine the most appropriate method of managing the appeal.

     24. Ibid at [48]-[54] per Hodgson JA (Mason P and Campbell JA agreeing).

     25. Zepinic v Chateau Constructions (Australia) Ltd (No 2) [2013] NSWCA 227 at [76] per McColl JA.

239. Burrell Solicitors also contends that there was no proper basis for the claim in the primary proceedings for an order setting aside the judgments entered on the basis of the certificates. While that relief was sought in the cross-claim, the Champion parties did not plead any grounds upon which the validity of the costs determinations or the judgments entered pursuant to them was challenged.

240. Burrell Solicitors contends that the scheme of Div 11 of Pt 3.2 of the Legal Profession Act is designed to ensure that the assessment of costs, and any review or appeal from such an assessment, be conducted as speedily and efficiently as possible. The role of the courts in that process is subjected to carefully circumscribed limits. [26] Burrell Solicitors contends that it would be inconsistent with the terms, scope and purpose of those provisions to permit an unsuccessful party to a review of a costs assessment to delay for more than three years before seeking to initiate an appeal in respect of the assessments under s 384 of the Legal Profession Act.

     26. See Griffith v Australian Broadcasting Corporation [2013] NSWSC 750 at [23]-[24] per Beech-Jones J; and Adelaide Bank Ltd v Phontos [2016] FCA 824 at [70] per Robertson J.

241. Burrell Solicitors contends that the prospects of success on the prospective appeal under s 384 of the Legal Profession Act are insufficient to justify an extension of time to appeal. That entails a consideration of the substance of the grounds of appeal, to which attention will be given in due course. It asserts that the parties conducted the litigation before the primary judge on the footing that the Champion parties had not appealed, or sought leave to appeal, from the determinations of the Costs Review Panel. Indeed, the primary judge adverted expressly to that matter in his Honour’s reasons. [27]

     27. Burrell Solicitors v Reavill Farm at [125], [152].

242. Burrell Solicitors asserts the Champion parties had a full and fair opportunity to advance in the primary proceedings any and all issues that they wished to ventilate in support of their contention that Burrell Solicitors should be prevented from enforcing the judgments entered on the basis of the costs determinations. The Champion parties have availed themselves of the opportunity to appeal from the decision of the primary judge rejecting their claims. His Honour concluded that the costs determinations and the judgments entered on the basis of them established that the Champion parties have a liability to Burrell Solicitors for the amounts determined and that those amounts represent a fair and reasonable charge for the services provided. His Honour held that the certificates did not prevent the Champion parties from seeking to establish in the primary proceedings that such liability was, or was part of, a loss suffered as a result of the conduct of Burrell Solicitors that was misleading or deceptive or amounted to a breach of contract or breach of fiduciary duty. Those causes of action failed on their merits, subject, of course, to the Liability Appeal.

243. Burrell Solicitors contends that to permit the Champion parties to challenge the decisions of the Costs Review Panel at this stage, more than three years after the time to do so expired and following the litigation before the primary judge, would result in real prejudice to it. It would be forced to incur the substantial costs, stress, inconvenience and distraction of defending the Costs Appeal and any remittal of the kind foreshadowed by the Champion parties, in circumstances where the Costs Appeal should have been brought in July 2013 and may well have been resolved much earlier. Burrell Solicitors contends that the circumstance that it has already been forced to defend itself against allegations made by the Champion parties, in the proceedings before the primary judge and now in this Court in the Liability Appeal, is a powerful reason why the Champion parties should not be permitted an extension of time. [28]

     28. See DCL Constructions Pty Ltd v Di Lizio [2007] NSWSC 1180.

244. At no time until shortly prior to the filing of the summons in the District Court did the Champion parties foreshadow any intention or possibility of seeking leave to appeal out of time. In the intervening period of more than three years, the parties have engaged intensively in litigation on multiple fronts on the footing that the judgments based on the costs determinations had not been, and would therefore not be, the subject of appeal. In that time, Burrell Solicitors served a statutory demand upon certain members of the Champion parties in reliance upon the judgments. That statutory demand was set aside by the Federal Court of Australia.

245. Separately, the Champion parties served a bankruptcy notice upon Mr Burrell in connection with an unrelated debt obtained by assignment from a third party. That resulted in further litigation in the Federal Circuit Court and a subsequent appeal to the Full Court of the Federal Court. The Champion parties obtained an order for costs against Burrell Solicitors in other proceedings in the Supreme Court, which they have indicated they will seek to set off against the costs judgments. In the other proceedings in the Supreme Court, enforcement of the costs judgments was stayed upon terms including payment into Court of part of the judgment sum.

246. Following dismissal by the primary judge of the claims by the Champion parties, Burrell Solicitors again sought to enforce the costs judgments by serving statutory demands. The Champion parties again sought orders staying the enforcement of the costs judgments. Burrell Solicitors, in turn, sought to restrain the Champion parties from dealing with their assets in a manner that may prejudice enforcement of the costs judgments. Those applications resulted in several contested hearings before a modus vivendi as agreed between the parties involving the payment of funds into Court and an undertaking by Mr Champion not to dispose of an identified parcel of real property.

247. Burrell Solicitors points out that, at no time during the course of the primary proceedings or after the commencement of the Liability Appeal did the Champion parties apply for expedition of the hearing. Despite the litigation in multiple jurisdictions over several years described above, the Champion parties made no effort to appeal from the determination of the Costs Review Panel until September 2016. They did not, prior to that time, notify Burrell Solicitors that they would seek to delay further the ultimate enforcement of the costs judgments by bringing the Costs Appeal. Burrell Solicitors says that those circumstances result in serious prejudice to it in the event that time were now extended. Of course, a significant reason for the removal of the costs appeal from the District Court to this Court was to avoid further delay.

248. The Champion parties rely on the fact that during the conduct of the proceedings before the primary judge, the enforcement of the costs judgments was stayed. They assert that the delay is explained by the conduct of the proceedings at first instance and that the preservation of the status quo by reason of the stay removes any question of prejudice. They repeat that questions of liability for payment of the costs ought to be resolved before any question of the quantum of the costs is resolved. They assert that, until his Honour had delivered reasons concerning the wrongful conduct by Burrell Solicitors, the utility of an appeal from the decision of the Costs Review Panel could not be known because the seriousness of the misconduct complained of in the proceedings at first instance bore upon the exercise of the assessor’s discretion.

249. The Champion parties contend that it would not have been appropriate to prosecute an appeal from the determination of the Costs Review Panel in relation to the other four grounds in the summons commencing the appeal since to do so would risk not being able to prosecute the second ground. Therefore, they say, the appropriate course was that taken in the proceedings at first instance, namely, to include a prayer for an order setting aside the costs judgments in the Supreme Court so as to be in a position to challenge the decision of the Costs Review Panel under s 384 of the Legal Profession Act.

250. That contention, however, does not have regard to the fact that no basis for setting aside the costs judgments could be demonstrated unless the determination of the Costs Review Panel was set aside. That could only be done by way of appeal to the District Court on such grounds as were available under the Legal Profession Act in such an appeal. On the other hand, the position could have been preserved by adopting the course suggested by Burrell Solicitors. That is to say, the Champion parties could have filed a summons commencing the appeal, thereby making clear to Burrell Solicitors that their intention to challenge the determination of the Costs Review Panel.

251. The second ground relied upon in the Costs Appeal is that the assessor ought not to have embarked on the assessment so long as the proceedings before the primary judge were on foot. In the events that happened, the Champion parties obtained a stay of the costs judgments. To that extent, they were not prejudiced by the fact that the assessor embarked on and completed the assessment. The assessment required a determination of the quantum of costs that was fair and reasonable for the work actually performed by Burrell Solicitors. The question of whether the Champion parties should pay that amount would depend upon the outcome of the proceedings before the primary judge. So long as there was a stay, there is no reason why they could not have abandoned the second ground and pursued the other grounds which are concerned with determining whether the quantum of costs was fair and reasonable.

252. The Champion parties assert that there has been no prejudice to Burrell Solicitors by reason of the delay in the commencement of the Costs Appeal. They assert that the dispute as to the liability to pay the amount of the costs assessments and the effect of that liability was raised both with the costs assessor and the Costs Review Panel and, thereafter, the judgments entered pursuant to the determinations were stayed. They dispute that the Costs Appeal is a further opportunity to challenge or re-litigate matters already determined in the costs assessment and by the Costs Review Panel. There has been no determination of costs by reference to the factual findings made by the primary judge, which are highly critical of Burrell Solicitors. They assert that there has been significant prejudice to them by reason that the costs assessments were made without reference to those findings.

253. The Champion parties also assert that the true cause of the delay in the listing of the first instance proceedings before the primary judge should be laid at the feet of the Burrell parties. Thus, on 24 December 2013, Burrell Solicitors commenced proceedings 2013/386077 (the 2013 proceedings). The 2013 proceedings were then amalgamated with the proceedings before the primary judge. Burrell Solicitors did not file its statement of claim in the 2013 proceedings until 6 March 2014, a delay of two months. It was then necessary for the parties to file further evidence in relation to the claims made by Burrell Solicitors in the 2013 proceedings. Ultimately, the 2013 proceedings were not pressed and were dismissed. The primary judge reserved his decision from 3 June 2015 until 24 March 2016.

254. As indicated above, the Costs Appeal was commenced a substantial period after the time provided for under the Legal Profession Act and the UCPR. Burrell Solicitors was entitled to assume that, notwithstanding that the Liability Proceedings were on foot, followed by the Liability Appeal, once those proceedings were completed, the dispute with the Champion parties would be at an end. In the events that have occurred, even if the Liability Appeal is dismissed, and the Costs Appeal were allowed in relation to Ground (1) or Grounds 3, 4 or 5, there would be further delay before final resolution of the dispute. Ground (2) has now become otiose, insofar as the Liability Appeal and the Costs Appeal will be decided at the same time. That is to say, even if there is substance in Ground (2), it no longer matters.

255. Having regard to the conclusion reached above in relation to the grounds relied on in the Liability Appeal, the Liability Appeal must be dismissed. The Costs Appeal therefore has the possible effect of prolonging the dispute between the Burrell parties and the Champion parties. As will appear below, there is no substance in the grounds of appeal of the Costs Appeal. An extension of time should therefore be refused. Nevertheless, it is appropriate to address the grounds of appeal.

Ground (1): Denial of procedural fairness

257. The Champion parties contend that it is apparent from the reasons of the Costs Review Panel that it adopted a procedure that occasioned practical injustice to them in several ways. The Costs Review Panel stated that it determined that it would not receive any fresh submissions or take any fresh evidence in relation to the review. Nevertheless, the reasons of the Costs Review Panel indicate that, on 5 April 2013, a member of the Costs Review Panel inspected the file of Burrell Solicitors at its offices at Kogarah. The reasons record that the file consisted of over 60 lever-arch files and 6,000 email exchanges, many of which were between Burrell Solicitors and the Champion parties. The Champion parties complain that none of that material was before the assessor.

258. The Champion parties assert that, if the Costs Review Panel determined to adopt the course of inspecting that material, they were entitled to know and be present, at least so that they could hear anything that was said or pointed out by Burrell Solicitors to the member of the Costs Review Panel. They could then be satisfied that the member of the Costs Review Panel was being shown the work actually undertaken by Burrell Solicitors that was referrable to the costs that were the subject of dispute.

259. The Champion parties also complain that only one member of the two-member Costs Review Panel reviewed the material upon which the decisions of the Costs Review Panel were purportedly made. They contend that the Costs Review Panel, as a whole, could not have fulfilled its statutory task when each member looked at different material. They also complain that the Costs Review Panel did not permit submissions to be made on the additional documents reviewed by one of its members. They say that, once the Costs Review Panel had taken on the function of the costs assessor, more was required than merely a review of the original file. They say that the Costs Review Panel manifestly failed to comply with s 359 of the Legal Profession Act.

260. Burrell Solicitors responds by asserting that a denial of procedural fairness is not a “decision” of the Costs Review Panel “as to a matter of law arising in the proceedings” within the meaning of s 384 of the Legal Profession Act. Section 384 provides a narrow avenue of appeal which is restricted to a challenge to a decision as to a matter of law arising in the proceedings to determine an application. It has an ambit that is not equivalent to error in point of law or the like. [29] Burrell Solicitors asserts the expression “decision as to a matter of law” as used in s 384 of the Legal Profession Act does not include a denial of procedural fairness. [30] In effect, Burrell Solicitors contends the remedy for a denial of procedural fairness would be to seek prerogative relief in the Supreme Court under s 69 of the Supreme Court Act 1970 (NSW) (the Supreme Court Act).

     29. Adamson v Miller [2005] NSWSC 971 at [10] per Malpass AsJ

     30. Ibid at [10], [18] per Malpass AsJ. I note that Adamson v Miller was concerned with the costs assessment regime under the Legal Profession Act 1987 (NSW), specifically s 208L. Section 208L is in substantially the same terms as s 384 of the Legal Profession Act 1997 (NSW) and the phrase “decision of a costs assessor as to a matter of law arising in the proceedings” appears in both provisions.

257. Burrell Solicitors asserts, in any event, that there was no denial of procedural fairness on the part of the Costs Review Panel. It asserts that the Costs Review Panel did not determine to receive fresh evidence under s 375(3) of the Legal Profession Act but rather required production, under s 376(1) of the Legal Profession Act, of documents relating to the assessment of costs, namely, the file of Burrell Solicitors. It says that, as a matter of convenience, production was effected by means of inspection at the offices of Burrell Solicitors. Procedural fairness did not require the Champion parties to be present during such an inspection. The obligation of the Costs Review Panel under s 359(1) to give the parties a reasonable opportunity to make written submissions did not require that there be a further round of submissions following the inspection of the file by a member of the Costs Review Panel.

258. Burrell Solicitors asserts that procedural fairness does not ordinarily require that a decision-maker adopt an “open file” policy that would have the effect of disclosing every submission or piece of evidence to an affected party. [31] There is no general obligation to disclose the deliberative processes or proposed conclusions of a decision-maker. The concern of the law is to avoid practical injustice. The practical question is whether the Champion parties were given a reasonable opportunity to address issues relevant to their interests.

     31. See for example Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381; [2002] NSWCA 288 at [44] per Spigelman CJ, [231] and [245] per Mason P (Ipp AJA agreeing).

259. Burrell Solicitors asserts that no adverse material, let alone any adverse material that was credible, relevant or significant was identified or even suggested by the Champion parties as flowing from the inspection of the file of Burrell Solicitors by the member of the Costs Review Panel. It asserts that, even if the Court were to conclude that there was any denial of procedural fairness, any such denial had no material effect on the outcome before the Costs Review Panel. The Costs Review Panel emphasised that it agreed with the reasons of the costs assessor and adopted the entirety of those reasons as its own. No part of the reasons was affected by or depended upon any observation made by the member of the Costs Review Panel during their inspection of the file. Thus, Burrell Solicitors says, any denial of procedural fairness could not have deprived the Champion parties of the possibility of a more favourable outcome before the Costs Review Panel.

260. The Champion parties contend that a denial of procedural fairness is a jurisdictional error that constitutes a matter of law arising in the proceedings. [32] Accordingly, they say, the phrase “decision ... as to a matter of law” is wide enough to encompass a question of mixed law and fact. [33] The phrase used in s 384 is wide enough to encompass a denial of procedural fairness.

     32. See Re Refugee Tribunal; Ex Parte Aala (2000) 204 CLR 82; [2000] HCA 57 at [5] per Gleeson CJ, [41] per Gaudron and Gummow JJ, [142], [169] per Kirby J, [210] per Callinan J.

     33. Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 at [91] per Hayne, Heydon, Crennan and Kiefel JJ (French CJ agreeing).

261. In response to the contention raised by the Burrell Solicitors, at [259] above, the Champion parties point out that in their reasons the Costs Review Panel observed that there could be no doubt, having regard to the file, that the Champion parties instructed Burrell Solicitors to do work, that Burrell Solicitors did that work, and that the relationship continued over a long period of time. They say that the Costs Review Panel must have found the material to be "credible, relevant and significant", and that it considered it in a manner adverse to the Champion parties. Whether or not the file demonstrates that fact, there can indeed be no doubt as to those matters. The Champion parties cannot seriously dispute that finding. If that is the extent to which reliance was placed upon the observation of the 60 folders, there can be no finding of a denial of procedural fairness.

262. While it is most unfortunate that a member of the Costs Review Panel considered it appropriate to examine the file, it is not apparent to any extent that information was gleaned by the member of the Costs Review Panel upon which the Champion parties would be entitled to comment in order to ensure procedural fairness. There is no substance in Ground (1).

Ground (2): Absence of Determination of Liability

267. The Champion parties submitted to the assessor that the question of the liability to pay costs to Burrell Solicitors should be referred to the Supreme Court for adjudication under the primary proceedings. The relevant principle is referred to at [269] above. [34] The Costs Review Panel rejected that contention by the Champion parties and found that the Champion parties had instructed Burrell Solicitors to do work, Burrell Solicitors did that work and the relationship continued over a long period of time. The Costs Review Panel held that a law firm is entitled to recover from its client fair and reasonable costs for work reasonably performed although an entitlement to costs arises by reason of the retainer of the lawyer by the client. In the present case, there was no challenge to the retainer of Burrell Solicitors by the Champion parties. The Costs Review Panel agreed with the manner in which the task was performed by the assessor, the reasons given by the assessor and the conclusions reached by the assessor. The Costs Review Panel observed that there may be issues that the Champion parties wished to have addressed by a court but that was a matter for the Champion parties. The Costs Review Panel did not consider that those issues went to any entitlement of Burrell Solicitors to an assessment of the costs for the work that it actually carried out.

     34. See Doyle v Hall Chadwick at [61].

268. The assessor observed that the parties were involved in litigation in which the issue as to whether Burrell Solicitors had acted in accordance with competent professional practice was in issue. The assessor was of the view that the Court could disallow the costs determined and order a refund. The assessor observed that if they were wrong about that aspect of the case and Burrell Solicitors did not conduct itself in accordance with competent professional practice, nothing decided by the assessor would deprive the Champion parties of a remedy.

269. The Champion parties contend that the assessor erred at law and, because the Costs Review Panel relied on the assessor’s reasons, that error infected the determinations of the Costs Review Panel. The Champion parties assert that it is apparent from the Costs Review Panel’s reasons, as summarised above, that it did not understand the legal argument raised by them. They assert that the fact that they instructed Burrell Solicitors to perform work and that Burrell Solicitors performed the work and charged for it does not address the underlying liability, which may be vitiated by misleading and deceptive conduct. Thus, the Costs Review Panel was wrong to proceed to make its determination in circumstances where proceedings alleging breach of retainer, misleading and deceptive conduct and negligence were already on foot in the Supreme Court. The Champion parties point to the ultimate findings made by the primary judge that Burrell Solicitors engaged in conduct in contravention of s 42 of the Fair Trading Act and s 52 of the Trade Practices Act and, from 1 January 2011, s 18 of the ACL. The primary judge observed that a legal practitioner’s claim for remuneration may be defeated by the legal practitioner’s negligence. Thus, an assessment of what remuneration is fair and reasonable may require a determination of an allegation of negligence or failure to adhere to an instruction. If available procedures before the costs assessor did not enable such a determination to be made, the appropriate course would be for the costs assessor to decline making an assessment. [35]

     35. In Burrell Solicitors v Reavill Farm at [155], the primary judge referred to Doyle v Hall Chadwick at [61] per Hodgson JA (Mason P and Campbell JA agreeing).

270. Burrell Solicitors contends that neither the assessor nor the Costs Review Panel fell into legal error by failing to defer the assessment. Where the existence of the terms of the agreement between solicitor and client are in dispute in a way that would require the hearing of evidence to resolve, it may be appropriate for the costs assessor to decline to resolve the dispute. [36] However, Burrell Solicitors contends, that principle does not apply in the present case because the existence of the terms of the agreement were not in dispute in a way that would require the hearing of evidence to resolve.

     36. See Doyle v Hall Chadwick at [61] per Hodgson JA (Mason P and Campbell JA agreeing).

271. In any event, Burrell Solicitors contends, the question has now been resolved by the primary proceedings and will be resolved by the substantive appeal. The dispute as to whether any costs are payable will be finally determined by the substantive appeal. The primary judge quelled the dispute in circumstances where his Honour was aware of and carefully analysed the assessment made by the assessor as upheld by the Costs Review Panel. If the substantive appeal is dismissed, there would be no utility in setting aside the decision of the Costs Review Panel on the basis of Ground (2) or in remitting to it any further consideration of the assessment of the costs. Alternatively, if the Court allows the appeal from the orders made by the primary judge, any award of monetary compensation in favour of the Champion parties would be set off against the assessed amount of the costs judgments. Thus, success by the Champion parties on Ground (2) would not entitle them to re-open the question of the assessment of costs because the dispute as to whether any costs are payable would have been finally resolved by this Court. Whether or not the Costs Review Panel or the assessor erred in failing to defer the assessment is of no consequence.

Grounds (3) and (4): Wrong exercise of discretion

272. The Champion parties contend that, because the assessor proceeded to assess costs when liability was in dispute, he approached the discretionary task under s 317(4) of the Legal Profession Act incorrectly. Section 317(4) permits an assessor to reduce legal costs for non-disclosure in an amount that is considered to be proportionate to the seriousness of the failure to disclose. The assessor discounted the costs by five per cent by that reason. However, the Champion parties complain that that discount does not reflect the seriousness of the failure to disclose the significant discrepancy between the costs estimated by Burrell Solicitors and the costs that were actually charged.

273. The assessor allowed the discount in the amount of five per cent because he did not believe that the Champion parties were badly misled or that they received a standard of care that was inappropriate. They complain that that finding was at odds with the conclusions later reached by the primary judge. Further, it went to an issue that was very much in dispute in the proceedings at first instance. It required the resolution of contested factual questions and, the Champion parties contend, was a matter on which the assessor ought to have declined to make a determination. Had the assessor awaited the outcome of the proceedings before the primary judge, the findings of fact necessary to inform the exercise of discretion would have been before the assessor.

274. On that basis, the Champion parties contend, a five per cent discount for a failure to disclose of the magnitude in question is disproportionate. Even on the assessor’s view the failure was serious. The assessor referred to “a quite serious instance of a failure to disclose”, a failure in a legal obligation for reasons that were “totally unexplained”. The assessor described the failure as relating not only to ongoing disclosure but to the possibility and quantum of party/party costs.

275. The Champion parties complain that the amounts claims for costs by Burrell Solicitors amounted to more than $700,000 whereas the amount of the disclosure was $12,650. The claims were for costs outstanding and ignored the significant sums that had already been paid. They assert that in circumstances where the seriousness of the failure to disclose was so egregious, the assessor’s opinion that the conduct warranted only a five per cent discount was no more than a “token nod” to s 317(4) of the Legal Profession Act and was not an opinion reasonably open to the assessor. The Champion parties assert that that failure falls within the principles propounded in House v The King. [37]

     37. (1936) 55 CLR 499; [1936] HCA 40.

276. The Champion parties rely on the same reasoning for concluding that the assessor and the Costs Review Panel erred in not discounting the fees of Mr Robertson. The assessor declined to do so, on the basis that Burrell Solicitors was primarily reasonable for payment of counsel’s fees and should be allowed to recover them in full where the breach of s 316 was to a great extent beyond the control of Mr Robertson.

277. The Champion parties contend that the obligation of disclosure as between Burrell Solicitors and them was on Burrell Solicitors. If Mr Robertson failed in his obligations, the consequences ought not to be borne by the Champion parties as the client.

278. The Champion parties also complain that the assessor erred in holding that there was no right for Burrell Solicitors to have Mr Robertson’s costs assessed since s 351 of the Legal Profession Act provides such an avenue. They complain that the combination of the erroneous approach and the erroneous reasoning with regard to Mr Robertson’s fees resulted in a manifestly unjust determination.

279. The response of Burrell Solicitors is that none of the reasoning advanced on behalf of the Champion parties constitutes an error of principle or any other error of the nature identified in House v The King. Specifically, the errors alleged did not constitute a decision of the Costs Review Panel as to a matter of law arising in the proceedings to determine the application, within the meaning of s 384 of the Legal Profession Act.

280. Burrell Solicitors contends that the reasons given by the assessor for reducing the amount of costs by five per cent, with which the Costs Review Panel agreed, did not disclose an error of principle or other error capable of grounding an appeal under s 384 of the Legal Profession Act. Rather, Burrell Solicitors assert the selection of the reduction of five per cent was principled, fair and reasonable and was consistent with the conclusion ultimately reached by the primary judge that the failure to provide updated costs estimates did not cause the Champion parties any loss.

281. The matters raised in Grounds 3 and 4 do not disclose an error within House v The King. There was no application of a wrong principle and no misapprehension of the facts upon which the discretion was exercised. The grounds are an impermissible attempt to have the exercise of discretion re-exercised on appeal.

Ground (5): Misconstruing the evidence

282. By Ground (5), the Champion parties revert to the circumstances said to give rise to the denial of procedural fairness. The one member of the Costs Review Panel who inspected the file of Burrell Solicitors at the Kogarah office was presented with the wrong material. They assert that the member of the Costs Review Panel appears to have reviewed many folders that were not referable to the work that was the subject of the assessment that was under review by the Costs Review Panel. The Champion parties give no further particulars but say that they wish to rely on a Notice to Produce in order to establish that the wrong material was reviewed.

283. Burrell Solicitors contends that the errors complained of under Ground (5) are not capable of satisfying the requirements under s 384 of the Legal Profession Act that it is a decision as to a matter of law arising in the proceedings that is subject to appeal. Further, Burrell Solicitors points to the absence of any evidence demonstrating that the Costs Review Panel reviewed the wrong material. There is no power in the District Court, and therefore no power in this Court upon transfer of the proceedings to this Court, to make findings of fact on an appeal as to a matter of law under s 384. Whether or not such an error might have given rise to a right of review under s 69 of the Supreme Court Act is not to the point.

284. The matters complained of do not constitute a decision as to a matter of law arising in the proceedings. It was a matter for the Costs Review Panel to determine what inferences it should draw from the evidence. There was no misconstruing of the evidence by the Costs Review Panel.

Conclusion

285. The liability appeal should be dismissed. The application for an extension of time in relation to the Costs Appeal should be refused. The Champion parties should pay the costs of the Burrell parties in both proceedings.

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Endnotes

Decision last updated: 28 June 2017