Reynolds v Whitten

[2008] NSWSC 184

CITATION:	Reynolds v Whitten [2008] NSWSC 184
HEARING DATE(S):	3 March 2008
JUDGMENT DATE :	7 March 2008
JURISDICTION:	Common Law
JUDGMENT OF:	Harrison AsJ
DECISION:	(1) The appeal is dismissed. (2) Leave unders s 208M of the Legal Profession Act 1987 is refused. (3) The three decision of the Costs Assessor dated 10 August 2004 referred to in para [12] of this judgment are affirmed. (4) The amended summons filed 16 November 2004 is dismissed. (5) The plaintiffs are to pay the defendant's costs as agreed or assessed.
CATCHWORDS:	APPEAL - Costs Assessor
LEGISLATION CITED:	Legal Profession Act 1987
CATEGORY:	Principal judgment
CASES CITED:	Kioa v West (1985) 159 CLR 550 Larsen v Vile [1999] NSWCA 397 Livesey v New South Wales Bar Association (1983) 151 CLR 288 Re Minister for Immigration & Multicultural Affairs; ex parte Lam (2003) 214 CLR 1 Re Refugee Review Tribunal; Ex parte H (2001) 75 ALJR 982 Reynolds Jeanette v Whittens and Reynolds Stuart v Whittens [2002] NSWSC 155
PARTIES:	Stuart Reynolds & Jeanette Reynolds (Plaintiffs) Raymond Whitten t/as Whittens Lawyers & Consultants (Defendant)
FILE NUMBER(S):	SC 13106/2004
COUNSEL:	MF Galvin (Defendant)
SOLICITORS:	J Reynolds (Plaintiff) Whittens Lawyers & Consultants (Defendant)
LOWER COURT JURISDICTION:	Costs Assessor
LOWER COURT FILE NUMBER(S):	91608/2003
LOWER COURT JUDICIAL OFFICER :	Mr Richard Gulley
LOWER COURT DATE OF DECISION:	10 August 2004

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ASSOCIATE JUSTICE HARRISON

FRIDAY, 7 MARCH 2008

13106/2004 - STUART & JEANETTE REYNOLDS v
RAYMOND WHITTEN t/as WHITTENS
LAWYERS & CONSULTANTS
JUDGMENT (Appeal decision of costs assessor)

1 HER HONOUR: By amended summons filed 16 November 2004, the plaintiffs seek firstly, an order granting leave to appeal the decision of the Costs Assessor Mr Richard Gully dated 10 August 2004 in proceedings 91608/2003 pursuant to ss 208L and 208M of the Legal Profession Act 1987; and secondly, an order that the certificate of determination of costs be set aside.

2 The plaintiffs are Stuart Reynolds and Jeanette Reynolds (the Reynolds). The defendant is Raymond Whitten t/as Whittens Lawyers & Consultants (Whittens). The Reynolds relied on the affidavit of Jeanette Reynolds sworn 11 July 2005 and the “Plaintiff’s Appeal Book” filed 23 March 2005. Whittens relied on the affidavit of Raymond Laurence Whitten sworn 4 November 2004. Both Mr and Mrs Reynolds were not legally represented. Mrs Reynolds presented their case. Mr Reynolds added some points he wished to convey to the Court.

Grounds of appeal

3 The plaintiff appeals the whole of the decision of the Costs Assessor Mr Richard Gulley in accordance with ss 208L and 208M of the Legal Profession Act (the Act) on the grounds that firstly, the costs assessor erred in reaching his decisions by failing to take into account relevant considerations; and secondly, the Costs Assessor erred in the manner in which he conducted the assessment, in his ruling and his determination.

4 The statement of grounds of appeal are firstly, that the costs assessor failed to order separate bills as between the two plaintiffs; secondly, the costs assessor denied the plaintiffs natural justice by (i) failing to adjourn the matter in circumstances where the assessment ought to have been adjourned pending determination of proceedings by the plaintiffs against the defendant, (ii) by failing to delay the matter in order to allow the plaintiffs time to apply for a stay of the assessment, (iii) the costs assessor, without notice, terminated the assessment, resulting in the plaintiffs not filing their objections to the bills in issue, and (iv) the costs assessor failed to allow the plaintiff sufficient time to prepare objections to the bills; thirdly, by reason of the matter particularised, the costs assessor determined the matter upon insufficient and/or inaccurate material and fell into error by relying upon material which was inaccurate and which could be shown to be so; and fourthly, the assessment miscarried in that the costs assessor conducted the matter without an appearance of impartiality such that a reasonable observer might have had a reasonable apprehension of bias.

Background

5 Originally, Mr and Mrs Reynolds commenced proceedings in the District Court claiming damages for personal injury arising from a motor vehicle accident. These claims were subsequently settled.

6 Whittens acted for Mr and Mrs Reynolds as their solicitor during their motor vehicle proceedings. The bills of costs rendered by Whittens were assessed by a costs assessor. Costs Assessor, Mr Cockle issued two certificate of assessment on 29 August 1999.

7 On 29 September 1999, the Reynolds each filed summons appealing the decision of Costs Assessor Cockle.

8 The matter was heard by O’Keefe J over 13 days commencing on 18 October 2000. On 7 March 2005 O’Keefe J delivered judgment (Reynolds Jeanette v Whittens and Reynolds Stuart v Whittens [2002] NSWSC 155). O’Keefe J in his introduction set out an outline as follows:

“Before the Court are two summonses, one filed on 24 September 1999 by Jeanette Reynolds, the other filed on the same day by her husband, Stuart Reynolds. Both are concerned with assessments of costs made by a costs assessor on 29 August 1999, in respect of bills of costs rendered by Whittens, solicitors (the defendant) in District Court actions 70234/94 (also numbered 3734 of 1997) and 70223/94 (also numbered 3733 of 1997). The party/partybill as submitted by the defendant in Mr Reynolds' case claimed an amount of $102,522.34. A considerable amount was taxed off, resulting in an assessmentof $57,932.21. The solicitor/client bill in Mr Reynolds' case claimed $78,644.24. This was taxed down resulting in an assessment of $50,810.96. In the defendant's party/party bill in Mrs Reynolds' case the amount claimed was $94,865.31. This too was taxed down with a resultant assessment of $53,350.95. The solicitor/client bill in Mrs Reynolds' case claimed $76,955.83. The assessment in respect of such bill was $50,956.25.
Originally both summonses sought substantive orders that :

“1. Leave be granted by appeal to the court against the determination made by the costs assessor, Mr Cockle, on 29 August 1999 pursuant to Act 208L and to Act 208M.

2. An order that the decision of Mr Cockle be set aside.

3. An order for re-determination.
4. That the Court determine the appeal.”
In October 1999 the plaintiffs sought orders for the amendment of their summonses to alter the first order so as to restrict the relief as follows:
“1. Leave be granted by appeal to the Court against the determination made by the costs assessor on 29 August 1999, pursuant to s.208M of the Act”
and to include an additional order as follows:
“4. That the Costs Agreement between the Appellant and Respondent of 21 April (7 May) 1997 be declared void and be set aside.”

The grounds on which the plaintiffs relied were broad and wide ranging…””

9 On the first day of that hearing O’Keefe J ordered that both proceedings be heard together. The hearing took place over many days. O’Keefe J dismissed both summonses with costs.

10 Whittens’ costs of the proceedings before O’Keefe J were assessed by a costs assessor, Mr Richard Winston Gully. It is the appeal (for the application for leave to appeal) that is the subject of these current proceedings. Mr and Mrs Reynolds sought leave to appeal the decision of O’Keefe J. On 22 November 2002 this application was dismissed with costs.

Certificate as to determination of costs

11 The total amount of costs claimed by Whittens was $233,732.68. The total amount allowed by the Costs Assessor for the three bills was $188,873.91.

12 On 10 August 2004, the Costs Assessor issued three certificates of assessment. In the application between Whittens and Jeanette Reynolds, the Costs Assessor assessed as a fair and reasonable amounts of cost to be paid by Mrs Reynolds to Whittens as $34,330.90. In the application between Whittens and Stuart Reynolds the Costs Assessor assessed as a fair and reasonable amount of costs to be paid by Mr Reynolds to Whittens as $42,434.88. In the application between Whittens and Jeanette Reynolds and Stuart Reynolds the Costs Assessor assessed as a fair and reasonable amount of costs to be paid by the Reynolds as $112,108.13. (Certificate of assessment see Ex 1).

The relevant statutory provisions

13 The Legal Profession Act 1987 is applicable to this case even though it has since been replaced by the Legal Profession Act 2004.

14 Section 208M of the Act reads:

“Appeal against decision of costs assessor by leave

(1) A party to an application relating to a bill of costs may, in accordance with the rules of the Supreme Court, seek leave of the court to appeal to the court against the determination of the application made by a costs assessor.

(2) A party to an application relating to costs payable as a result of an order made by a court or a tribunal may, in accordance with the rules of the court or tribunal, seek leave of the court or tribunal to appeal to the court or tribunal against the determination of the application made by a costs assessor.

(3) The Supreme Court or court or tribunal may, in accordance with its rules, grant leave to appeal and may hear and determine the appeal.

(4) An appeal is to be by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given.

(5) After deciding the questions the subject of the appeal, the Supreme Court or court or tribunal may, unless it affirms the costs assessor’s decision, make such determination in relation to the application as, in its opinion, should have been made by the costs assessor.”

15 Section 208L of the Act provides:

"Appeal against decision of costs assessor as to matter of law

(1) A party to an application who is dissatisfied with a decision of a costs assessor as to a matter of law arising in the proceedings to determine the application may, in accordance with the rules of the Supreme Court, appeal to the Court against the decision.

(2) After deciding the question the subject of the appeal, the Supreme Court may, unless it affirms the costs assessor's decision:


(a) make such determination in relation to the application as, in its opinion, should have been made by the costs assessor, or

(b) remit its decision on the question to the costs assessor and order the costs assessor to re-determine the application.

(3) On a re-determination of an application, fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given."

The costs assessment

16 The approach that should be taken by the court in an appeal from a costs assessor was set out in Larsen v Vile [1999] NSWCA 397. An appeal under s 208L is confined to law. An appeal under s 208M (provided leave is granted) is a complete new hearing.

17 Initially, Whittens submitted one bill of costs which included legal work and disbursements for both Mr and Mrs Reynolds to the Costs Assessor. Mr and Mrs Reynolds wrote to the Costs Assessor submitting that separate bills of costs should be filed by Whittens as there were two matters before the Court. The Costs Assessor sought further submissions on that point.

18 On this issue, the Costs Assessor stated:

“I was informed by the costs applicant that the costs respondent conducted a separate matter in the Supreme Court up to the 18th October 2002 when matters were ordered by the Court to be heard together. I considered the submissions of the parties and I directed that the costs applicant serve separate bills of costs for work completed in each matter up to 18th October 2000. I further directed that separate bills would not be required from that date as the matters were heard together.
On 24th May 2004 the costs applicant served an amended bill of costs on the costs respondent for the period up to and including 18th October 2000 and an amended bill of costs from 19th October 2000 onwards.”

19 The Costs Assessor, in his written reasons further stated:

“On 4th June 2004 I requested the costs respondent to make objections should she wish to the items contained in the three bills of costs. In response to my letters the costs respondent on 18th June 2004 sought an extension of time to file objections and requested that I further delay the assessment process pending further progress in the District Court proceedings at Gosford. On 22nd June 2004 I informed the costs respondent that I was not prepared to await the outcome of the proceedings in the District Court and I granted an extension of time to file objections to 6th July 2004. At the same time I indicated that no further extensions would be granted.
On 6th July 2004 I received by facsimile a letter of that date from the costs respondent informing me that an application had been forwarded to the Supreme Court seeking leave to appeal the decision of O’Keefe J and that the costs respondent was seeking to stay the assessment process. A copy of the Notice of Motion was supplied.
The costs applicant submitted on 8 July 2004 that the application for leave to appeal the decision of O’Keefe J was dismissed with costs on 22 November 2002 and they were at a loss to understand the Notice of Motion.
On 16th July 2004 I received a facsimile letter from the costs respondent where I was informed, inter alia, that the costs respondent proposed to file an application in the District Court proceedings to stay the assessment process that the costs respondent would be notified when the matter could proceed.
I formed the view that the assessments should be completed as sufficient time had elapsed. No objections were received from the costs respondent to the costs applicant’s bill of costs.
In relation to my determination I have had regard to the bills of costs as served by the costs applicant, the correspondent as submitted by the costs applicant, the correspondence as submitted by the costs respondent particularly the lengthy submissions by the costs respondent as to why the assessment process should be suspended.”

Denial of natural justice or procedural fairness

20 In Kioa v West (1985) 159 CLR 550 the High Court held that the duty to accord natural justice is a duty to act fairly. In the normal course, a party to judicial proceedings (as are those in a tribunal) could expect to be apprised of the nature of the case sought to be made against it, and of the date and time fixed for hearing so as to give it a reasonable opportunity to meet that case and to advance its own.

21 In relation to procedural fairness, in Kioa v West Mason J (at 584-585) stated that the law had now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention. Procedural fairness is a notion of a flexible obligation to adopt fair procedures, which are appropriate and adapted to the circumstances of the particular case. Whether there is a denial of procedural fairness depends on the circumstances in each case.

22 In Re Minister for Immigration & Multicultural Affairs; ex parte Lam (2003) 214 CLR 1 the High Court discussed the manner in which procedural fairness cases are approached by the courts, and Gleeson CJ said (at 14, [37]):

“Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice.”

23 It is necessary to examine the relevant statutory provisions of the Act.

24 Section 208(1) and (2) of the Act read:

“Consideration of applications by costs assessors

(1) A costs assessor must not determine an application for assessment unless the costs assessor:


(a) has given both the applicant and any barrister, solicitor or client or other person concerned a reasonable opportunity to make written submissions to the costs assessor in relation to the application, and

(b) has given due consideration to any submissions so made.

(2) In considering an application, a costs assessor is not bound by rules of evidence and may inform himself or herself on any matter in such manner as he or she thinks fit.”

25 In deciding what was fair and reasonable the costs assessor had to consider the matters in s 208A(1) set out below and was entitled to have regard to the paragraphs in s 208B.

“Section 208A Assessment of bills generally
(1) When considering an application relating to a bill of costs, the costs assessor must consider:

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

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

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

(2) A costs assessor is to determine the application by confirming the bill of costs or, if the assessor is satisfied that the disputed costs are unfair or unreasonable, by substituting for the amount of the costs an amount that, in his or her opinion, is a fair and reasonable amount.”
…
(5) A costs assessor may not determine that any part of a bill of costs that is not the subject of an application is unfair or unreasonable.”

26 The Costs Assessor carried out his tasks under s 208 of the Act. He gave the parties an opportunity to make submissions. Mr and Mrs Reynolds availed themselves of the opportunity and submitted that separate bills of costs should be furnished by Whittens to the Costs Assessor. The Costs Assessor partially agreed with their submission on this point. In my view, once both proceedings were ordered to be heard together and that evidence in one be evidence in the other, it would be difficult, if not impossible for Whittens to itemise the work done in Mrs Reynolds’ case as opposed to Mr Reynolds’ case. The decision of the Costs Assessor for separate bills up to the decision that the matters were ordered to be heard together was correct. There is no error in law.

27 The Reynolds sought adjournments of the assessment. The Costs Assessors did not accede to this request. The Reynolds were given the opportunity to file notices of objection and time for so doing was extended by the Costs Assessor. However, they did not elect to file notices of objection. The decision to not grant a further adjournment was open to the Costs Assessor.

28 The law on the topic of apprehended bias is not in doubt. Apprehended bias will exist where a fair minded lay observer, who is properly informed as to the nature of the proceedings, the matter in issue and the conduct of the Tribunal, might reasonably apprehend that the Tribunal might not bring an impartial mind to the resolution of the question to be decided - see Re Refugee Review Tribunal; Ex-parte H (2001) 75 ALJR 982 at [27]; Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 293-294. I have read the decision of the Costs Assessor and the correspondence passing between him and the parties. There is nothing that would lead to the conclusion that a reasonable observer might apprehend that the Costs Assessor might not bring an impartial mind to the costs assessment.

29 There is no error of law. There is nothing that merits the grant of leave under s 208M of the Act. The appeal is dismissed. Leave under s 208M is refused. The amended summons filed 16 November 2004 is dismissed. The three decisions of the Costs Assessor dated 10 August 2004 referred to in para [12] of this judgment are affirmed.

30 Costs are discretionary. Cost normally follow the event. The plaintiffs are to pay the defendant’s costs as agreed or assessed.

The Court orders:

(1) The appeal is dismissed.

(2) Leave under s 208M of the Legal Profession Act 1987 is refused.

(3) The three decisions of the Costs Assessor dated 10 August 2004 referred to in para [12] of this judgment are affirmed.

(4) The amended summons filed 16 November 2004 is dismissed.

(5) The plaintiffs are to pay the defendant’s costs as agreed or assessed.
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