Rural and General Insurance v Goldsmiths Lawyers
[2012] NSWSC 358
•27 April 2012
Supreme Court
New South Wales
- Amendment notes
Medium Neutral Citation: RURAL AND GENERAL INSURANCE v GOLDSMITHS LAWYERS [2012] NSWSC 358 Hearing dates: 8, 9, 18 August 2011 Decision date: 27 April 2012 Jurisdiction: Common Law Before: HALL J Decision: I make the following orders:
(1) A declaration that the Costs Assessor, John Hope Gibson erred in law in his decision on 11 November 2009 by determining that he had no jurisdiction to assess the Application for Assessment of Costs lodged on 22 December 2008.
(2) An order quashing the Certificate of Determination of Costs Assessor John Hope Gibson issued on 11 November 2009.
(3) A declaration that the Review Panel erred in law in affirming the Costs Assessor’s determination that he had no jurisdiction or power and in determining in its Reasons for Determination on 15 September 2010 that the Costs Assessor’s reasons were correct and should not be disturbed.
(4) An order quashing the Certificate of Determination of Costs by Costs Review Panel issued on 15 September 2010.
(5) An order that the Certificate of Determination of Costs of Review issued by the Review Panel on 15 September 2010 in the sum of $1,405.25 in Costs Review No 2008/00020713 be set aside.
(6) A declaration that the Costs Assessor had jurisdiction to determine the Application for Assessment of Costs filed in costs assessment 2008/00020713.
(7) An order pursuant to s 728 of the Legal Profession Act 2004, that the defendant give to the plaintiff an itemised bill of costs in respect of legal services provided by the defendant in the matter of Rural & General Insurance Broking Pty Ltd v Australian Prudential Regulation Authority for the period to which the bill of costs, the subject of Costs Assessment 2008/00020713, relates.
The defendant is to pay the plaintiff’s costs of the proceedings on the ordinary basis
Catchwords: COSTS ASSESSMENT - Misdescription of applicant for costs assessment - costs assessor erred in determining no jurisdiction - misnomer and wrong identity of applicant - Review Panel's determining costs assessor's determination also wrong in law, determination of assessor and review panel set aside - application under s 178 Legal Profession Act 2004 - order made for itemised bills of costs in respect of the subject of the costs assessment application. Legislation Cited: Legal Profession Act 2004 Cases Cited: Bridge Shipping Pty Ltd v Grand Shipping SA and anor (1991) 103 ALR 607
Evans Constructions Co Ltd v Charrington & Co Ltd [1993] QB 810Category: Principal judgment Parties: Rural and General Insurance Broking Pty Ltd
Barrie Goldsmith t/as Goldsmiths Lawyers ACN 093 483 928Representation: Ms M Castle
Mr R Beech-Jones SC
DG Thompson Lawyers
Goldsmiths Lawyers
File Number(s): 2010/390368
Judgment
The plaintiff commenced proceedings by summons filed on 23 November 2010 in respect of decisions purportedly made under the Legal Profession Act 2004 ("the Act"). The first was the decision of a costs assessor. The second was a decision of a Review Panel.
The plaintiff seeks relief as set out in paragraphs 3 to 6 of the summons. In particular, an order in the nature of certiorari is sought quashing each of the decisions and an order setting aside a Certificate of Costs of Review issued by the Review Panel.
The plaintiff also seeks an order pursuant to s 728 of the Act that the defendant, a solicitor, give him a bill of costs in respect of legal services he provided in proceedings, namely proceedings between, Rural and General Insurance Broking Pty Ltd and the Australian Prudential Regulation Authority in the period commencing 26 June 2006 until the matter was completed ("the APRA proceedings").
In moving on the summons Ms M Castle of counsel identified two distinct areas of relief as follows:
iRelief arising out of a costs assessment and a review of the costs assessment (in the latter respect the plaintiff filed an application for assessment in respect of various invoices). Some, at least, of those invoices were within the 12 month period described by the Legal Profession Act. There was a misdescription of name and the costs assessor directed the plaintiff to file an amended application.
Complaint was then made by the defendant that the amended application was out of time. The assessor agreed and said that he no longer had jurisdiction to determine the matter. The orders sought by the plaintiff in the present proceedings accordingly relate to what occurred before the costs assessor and the Review Panel which confirmed the costs assessor's decision.
iiA separate and distinct area of relief sought in the summons relates to an order sought under s 728 of the Legal Profession Act that a bill of costs be delivered to the plaintiff in respect of the work done for it by the defendant. The plaintiff seeks such a bill in respect of work done in the abovementioned proceedings. Those proceedings were defamation proceedings brought by the plaintiff against APRA in the ACT Supreme Court. There was a retainer between the plaintiff company and Goldsmiths Lawyers. The bill is sought in respect of the work done pursuant to that retainer.
In the course of her opening submissions, Ms Castle stated that one of the questions central to the resolution of the relief sought in paragraphs 1 to 5 of the summons is whether, though misdescribing itself by name (RGIB Broking Pty Ltd), the claimant was or ought to have been determined as Rural and General Insurance Broking Pty Ltd. Ms Castle submitted that a central question was whether an amendment was needed in light of the fact that attached to the application was a copy of the costs agreement between Goldsmith and Rural and General Insurance Broking Pty Ltd.
It was contended that there was never any doubt about which party was making the application. Accordingly, the further question was whether an amendment was in fact ever required. If an amendment was required, where power existed under the Act permitting an amendment to the application.
Evidence
The plaintiff relied upon the following evidentiary material:
iAffidavit of Charles Pratten sworn 23 December 2010.
iiAffidavit of Charles Pratten sworn 23 February 2011.
iiiAffidavit of Charles Pratten sworn 15 June 2011.
The defendant relied upon the affidavit of Barrie Goldsmith sworn 5 April 2011. Exhibit "BG1" contains primarily material relevant to the present proceedings.
The defendant relied upon the following affidavits:
iAffidavit of Barrie Goldsmith, solicitor, sworn 18 January 2011.
iiAffidavit of Barrie Goldsmith sworn 5 April 2011.
Outline of Material Facts
On 19 December 2006 an Application by Client for Assessment of Costs pursuant to the Act was made (Assessment No 2008/00020713). The Costs Applicant was described as "RGIB Insurance Brokers Pty Ltd". The Costs Respondent was described as "Goldsmiths Lawyers".
The Applicant then, in standard form, raised a number of matters. These included the applicant's wish to object to the Bill of Costs and applied to have the matter referred to a Costs Assessor (paragraph 1). In paragraph 2(a) of the Application for a Costs Assessment reference was made to a copy of the Costs Agreement between the parties as being attached to the Application.
The Application for Assessment of Costs was filed on 22 December 2008. It stated the amount in dispute as either the sum of $141,644 or $352,454.80.
The Application for Assessment of Costs filed on 22 December 2008 related to the bills of costs as follows:
Bill of Costs dated 13 February 2005
Bill of Costs dated 4 March 2008
Bills of Costs dated 2, 13 and 16 April 2008
The Application for Assessment filed on 22 December 2008, if a valid application, was filed within the 12 months period specified in s 350 (4) of the Act.
The Application was also supported by correspondence written by Mr Pratten as managing director. Including in the attached correspondence was a copy of a letter from Goldsmiths dated 15 August 2006 addressed to "Rural & General Insurance Broking Pty Ltd". The letter referred to the terms of engagement including the hourly rates to be charged for the litigation in the claim against APRA in the Supreme Court of the ACT.
There was also attached to the Application the following:
iAnnexure "B" which included copies of invoices from Goldsmiths Lawyers addressed to "Rural & General Insurance Broking Pty Ltd.
iiA letter dated 12 January 2009 written by the defendant, on behalf of Goldsmiths Lawyers, to the Manager, Costs Assessment. The letter raised a number of issues including the following:
"Correct identity of the costs applicant.
We note that the application by client for assessment of costs, being Form 1 identifies the costs applicant as being RGIB' Insurance Brokers Pty Ltd. We note that the heading of the letter dated 19 December 2008 from Mr Pratten refers to the applicant as being RGIB' Insurance Broking Pty Ltd.
So far as we are concerned, we have never acted for either of those entities.
We invite you to obtain verification from Mr Pratten as to the correct identity of the costs applicant. Depending upon his response, we oppose the current application in principle because, as we have said, and to the best of our knowledge, we have never acted for any entity bearing upon any of those names.
In the absence of satisfactory clarification, the application should be dismissed and should be dismissed at this time.
..."
iiiLetter dated 2 February 2009 from the Manager, Costs Assessment to Mr Pratten. The letter, inter alia, stated:
"...in relation to the first issue raised by Mr Goldsmith about the correct identity of the applicant, I note that you have put in the front of your application that RGIB' Insurance Brokers Pty Ltd is the applicant, and on the second page you have put RGIB Insurance Broking Pty Ltd. It would appear that the correct applicant is Rural & General Insurance Broking Pty Ltd as this is the entity subject of the costs agreement, subject of and annexed to your application. I would infer that you have used other names with the intention that they all refer to the same entity, namely Rural & General Insurance Broking Pty Ltd. If this is not the case, please send me your written comments as a matter of urgency and received no later than 10 February 2009.
If I do not receive a reply by you by 10 February 2009, I will treat Rural & General Insurance Broking Pty Ltd as the applicant and proceed to assign the matter to a Costs Assessor for determination.
..."
iiiLetter dated 30 March 2009 from Mr Pratten to Mr John Gibson (the costs assessor) noting that he had been appointed to assess the costs in the matter. The letter, inter alia stated:
"Firstly, in respect of the applicant entity, yes I can confirm it is Rural & General Insurance Broking Pty Ltd
..."
On 5 April 2009 Mr John Gibson, wrote to Goldsmiths Lawyers advising that he had been appointed as Costs Assessor in respect of the Application.
Mr Gibson set out in a number of paragraphs, detailed information that he required. He noted that he had no jurisdiction to assess costs where the application is made outside 12 months from the date of the bill as required under s 350 of the Act.
He further stated:
"I note the concern of the CR (costs respondent) that the client subject of the costs agreement was Rural & General Insurance Brokering Pty Ltd. The costs applicant is to confirm that the application is in the name of Rural & General Insurance Brokering Pty Ltd and that the application is to be amended accordingly. Failing this I will require a further explanation from the CA (costs applicant) in respect of the matters raised by the CR in its letter of 12 January 2009.
I propose to assess costs subject of the application to a total not exceeding $142,644 for which the appropriate Court fee has been paid.
As noted above I have no jurisdiction to assess costs where the application is not within time as required by s 350."
I note that Mr Gibson also stated that in order for him to assess costs he required an itemised bill, the subject of the application not exceeding a total of $142,644. He stated that the Costs Respondent was to supply and forward to the Costs Applicant detailed invoices requested by him within 21 days.
On 16 April 2009 Mr Pratten wrote to Mr Gibson stating:
"I can confirm that the correct and proper name of the Cost Applicant is RGIB Insurance Broking Pty Ltd, ABN 83 093 483 928."
I note the name specified in the letter of 16 April 2009 does not correspond to the name "Rural & General Insurance Broking Pty Ltd" as appeared in the standard footnote on the correspondence of Pratten dated 19 December 2008 referred to above."
On 20 April 2009 Mr Pratten again wrote to Mr Gibson and stated:
"I refer to your letter of 5 April 2009 and our part response of 16 April 2009 and confirmation of the correct name for the Cost Applicant - Rural & General Insurance Broking Pty Ltd (shortened for easy reference to RGIB Insurance Broking Pty Ltd).
On 1 May 2009 the defendant wrote to Mr Gibson and raised a number of matters. He observed that the application dated 19 December 2008, filed in the Registry on 22 December 2008 stated the name of the Applicant to be "RGIB Insurance Broking Pty Ltd". He then stated:
6As is apparent from the Cost Agreement dated 15 August 2006, and a copy of which is included in the application, the company for which we acted, and for which we provided legal services, was Rural & General Insurance Broking Pty Ltd. Furthermore:
AAll of our invoices were addressed to that company: and
BThat was the company that was the plaintiff in the proceedings in the Supreme Court of the Australian Capital Territory, and to which proceedings the invoices relate.
In the circumstances, there can be no doubt whatsoever that the client, being the entity to which legal services were provided, was Rural & General Insurance Broking Pty Ltd.
We note that the application as filed in the Registry was not made by that company. It was made, according to page 2 of the application by RGIB Insurance Broking Pty Ltd or perhaps even by RGIB' Insurance Brokers Pty Ltd. On any version, the application was not made by the client, being Rural & General Insurance Broking Pty Ltd.
Accordingly, it is our submission that, in respect of the application, you should find and certify as follows:
AThe application that was filed in the Registry was not filed by the client of the firm, being Rural & General Insurance Broking Pty Ltd.
BHaving regard to that finding, there is no assessment of costs to be undertaken in relation to the current application...".
The letter went on later to state that the attempt by Mr Pratten to correct the name of the Cost Applicant was "invalid" and "does not satisfy the appropriate legislative provisions". Additionally it was asserted that any attempt by the "Cost Applicant" to somehow file and serve an application would likewise be invalid. (p 2)
The letter went on to assert that the letter from Mr Pratten did not and could not cure the defect in the application filed on 22 December 2008.
The letter further observed that the legislation provided certain discretions in a Costs Assessor but there was no power or discretion to permit an application to be amended.
It was further contended that application of the type in question was not subject to the Rules of the Supreme Court, unless expressly permitted.
On 6 May 2009 Mr Pratten wrote to Mr Gibson apologising for the confusion in names concerning the Applicant. The letter, inter alia, referred to the fact that RGIB was a registered business name which was owned by Rural & General Insurance Broking Pty Ltd, ABN 83 093 483 928.
On 19 May 2009 Mr Gibson wrote to Goldsmiths Lawyers about a number of matters. One such matter related to his direction that the Cost Respondent provide an itemised bill of costs but that that had not been done.
Mr Gibson also observed:
"I am now satisfied that the correct CA is that noted on the correspondence on behalf of the applicant, namely Rural & General Insurance Broking Pty Ltd and will issue appropriate certificates noting this amendment. These particulars have been confirmed in letter dated 16 April 2009 from the CA.
As noted in my letter of 5 April the bill's itemised in the Annexure "B" of the letter dated 19 December lodged with the Application by CA total $164,143.
I assume that the CA requires I assess these costs and note the filing fee is 1% of the total of costs, ie $1,641.43. The Cost Applicant should forward direct to the Manager, Costs Assessment an amended Application enclosing payment for the additional fees ...ie $214.99... I then propose to assess costs on the invoices totalling $164,143 contained in Annexure "B".
Later in the letter Mr Gibson confirmed that he required the Cost Respondent to file an itemised bill in respect of the bills in question.
On 1 June 2009 Mr Gibson wrote to Goldsmiths Lawyers and, inter alia, observed:
"I refer to the letter of 1 May from Goldsmiths and agree that I do not have power to amend the Application to note the correct name of the Cost Applicant... in my opinion I have jurisdiction to entertain the amendment necessary for the matter to proceed subject to a referral by the Manager, Supreme Court if the parties consent..."
On 5 June 2009 Mr Goldsmith wrote to Mr Gibson in which, inter alia, he stated:
"...it is our submission that the relevant provisions of the Act constitute a statutory scheme and, as with all such schemes, it cannot be deviated from, unless there is express provision permitting that.
Accordingly, if an amended application is sought to be filed with the Manager we will oppose that."
On 29 June 2009 Mr Gibson wrote to Goldsmiths Lawyers stating:
"I refer to my letter of 1 June and note that the CA will require the consent of the CR to proceed with the proposed amendment to the Application failing which leave with the Court will be required..."
On 30 June 2009 Registrar of the Supreme Court forwarded to Goldsmiths Lawyers a copy of an amended Application filed 30 June 2009.
The Application was entitled "Amended Application by Client for Assessment of Costs" and inserted the name of the Cost Applicant as "Rural & General Insurance Broking Pty Ltd".
On 1 June 2009 Mr Gibson wrote to Mr Pratten stating:
"I refer to the letter of 1 May from Goldsmiths and agree that I do not have power to amend the Application to note the correct name of the Cost Applicant."
He later stated that although he had no jurisdiction, until such time as the Amended Application is referred to him to make directions, "...it is clear that the requirements for itemised bills will be applicable in respect of the Amended Application..."
On 2 July 2009 Mr Goldsmith wrote to the Manager, Costs Assessment. It was observed that the Registry had accepted an Amended Application dated 30 June 2009 but that there was no provision in the statutory scheme permitting an Amended Application to be filed. Accordingly an objection was made to the filing and service of that document.
It was submitted that the Manager had no right to treat any entity as an applicant - it was a matter for an entity to properly identify itself and to establish its legal right to be a party.
On 9 July 2009 the Costs Assessor, Mr Gibson wrote to Goldsmiths Lawyers confirming that he was of the opinion that he had no jurisdiction to proceed with an assessment of the Amended Application now filed.
On 9 July 2009 Mr Gibson wrote to the Manager conveying his opinion in that respect and that the proposed Amended Application was out of time and leave of the Court would be required under s 350(5) of the Act. Goldsmiths Lawyers, by letter dated 5 June 2009 advised that they did not consent to the filing of the Amended Application and would oppose any application under the section or leave being granted by the Court to file an Amended Application out of time.
On 15 July 2009 the Manager, Costs Assessment wrote to Rural & General Insurance Broking Pty Ltd and Goldsmiths Lawyers referring to the Costs Assessors' advice that he did not have jurisdiction to proceed with the assessment and stated "in the circumstances, the matter is now closed and no Certificate of Determination will be issued as an Assessment has not been conducted".
On 11 November 2009 Mr Gibson issued "Reasons".
The Review Process
An application dated 24 March 2010 entitled "Application for Review" of determination(s) of a Costs Assessor was made pursuant to the Act. The "Review Applicant" was identified as Rural & General Insurance Broking Pty Ltd and Goldsmiths Lawyers as the "Review Respondents".
On 15 September 2010 the Review Panel made a determination and published its reasons. It noted the date of the Application for Review was 13 April 2010. It was also noted "the Manager, Costs Assessment" allowed further time for the filing of the Application for Review on 24 March 2010 (s 373 (1) of the Act).
In paragraph 20 of its reasons the Review Panel stated:
"20The Review Panel agrees with the Costs Assessor's determination that he had no power to deal with the assessment because the Supreme Court had not made a determination that the application to be dealt with after the 12 month period (s350(5)). 21 paragraphs 31 to 41 of the Costs Assessor's reasons are basically correct and should not be disturbed.
The Statutory Provisions
The Act is comprised of 8 chapters. Chapter 3, Conduct of Legal Practice contains Part 3.2, Costs Disclosure and Assessment. This Part contains Division 11 - Costs Assessment. That Division contains provisions that are relevant to the present proceedings.
Subdivisions 2 to 4 are respectively concerned with assessments and the determination of assessments. Subdivision 5 contains provisions concerning reviews of determination by a Review Panel.
Applications by clients are made to the Manager, Costs Assessments: s350(1).
The term "client" is defined as meaning "a person to whom or for whom legal services are or have been provided".
In the present proceedings, on the evidence, the entity Rural & General Insurance Broking Pty Ltd was a "client" within the meaning of the statutory definition. In particular the evidence establishes, and there is no dispute, that that corporate entity was the client of Goldsmiths Lawyers in respect of the APRA proceedings and that Goldsmiths Lawyers rendered to it legal services with respect to those proceedings.
The "Manager, Costs Assessment" means the person holding office as Manager, Costs Assessment in the Attorney-General's Department and it includes a delegate of that person: s 4 of the Act. He or she refers an Application for Costs Assessment to a Costs Assessor under s 357.
A Costs Assessor has statutory powers to acquire information for the purposes of making a determination on an application for a Costs Assessment. These powers include the power to give a notice in writing to require a person (including an applicant and the law practice concerned) to provide written information. The scope of that power is broad. See
s 358(1)(b). The power to require information to be provided to an Assessor is an administrative power, compulsory in nature.
In considering an application, a Costs Assessor is not bound by the rules of evidence and may inform himself or herself on any matter in such manner as he or she thinks fit: s 359(2).
A Costs Assessor may obtain a copy of and have regard to a Costs Agreement: s 365(1). Those provisions enables a Costs Assessor to determine, by reference to a Costs Agreement, the parties to such agreement and the terms agreed upon.
In most cases there will be no dispute as to the existence of a relevant client/lawyer relationship or that an applicant for a Costs Assessment was a "client" within the meaning of the Act.
In the event that an issue is raised in relation to that or other matters then the statutory powers available to an assessor may be employed for the purposes of the assessor's determination. Those powers may be exercised for determining a disputed issue. Such powers include the power to obtain a copy of the Costs Agreement.
In the present case, as early as noted above, the Manager, Costs Assessment wrote to Mr Pratten on 2 February 2009 concerning the correct identity of the Applicant as being Rural & General Insurance Broking Pty Ltd. It was noted by the Manager that that was the entity that that was "...the entity subject of the Costs Agreement, subject of and annexed to your application. The Manager, Costs Assessment went on to state "I will infer that you have used other names with the intention that they all refer to the same entity, namely Rural & General Insurance Broking Pty Ltd..." The Manager stated that in the event of a reply not being received by 10 February 2009 "I will treat Rural & General Insurance Broking Pty Ltd as the applicant and proceed to assign the matter to a Costs Assessor for determination".
Submissions
In the written submissions on behalf of the plaintiff, Ms Castle dealt with the question as to whether or not error had been established by the Costs Assessor's determination.
The following matters were there noted:
(1)That from the outset of the assessment process, even before a Costs Assessor had been appointed by the Manager, Costs Assessment, the defendant argued that the Costs Assessor did not have jurisdiction to proceed with the assessment.
(2)Initially the objection taken by the defendant was that he had never acted for the applicant: (letter dated 12 January 2009 from Goldsmiths to the Manager, Costs Assessment). It was then observed that when that matter was clarified to the Costs Assessor's satisfaction (a reference to the letter dated 19 May 2009 from the Costs Assessor to Goldsmiths Lawyers), the defendant changed his objection to being that the Costs Assessor did not have jurisdiction due to the Amended Application being out of time.
(3)The Manager, Costs Assessment wrote, as discussed above, to the plaintiff on 2 February 2009. The submission was, it must be taken that the Manager made a decision that she had before her a valid application.
(4)When the Manager referred the application to the Costs Assessor, he proceeded on the basis that he had jurisdiction. Then this description of the applicant was clarified by the assessor to his own satisfaction.
(5)Having satisfied himself as to the correct identity of the applicant, there was no need for the Costs Assessor to direct, as he did on 19 May 2009, that an Amended Application be filed. It was contended that this was an error confirmed in the Costs Assessor's reasons which stated "the CA had incorrectly stated the name of the Costs Applicant so that it was necessary to file an Amended Application which was done of 30 June 2009": Reasons of Assessor at [35]
(6) In making the direction to file an Amended Application the Costs Assessor was incorrectly treating the system as akin to curial proceedings, where pleadings mark out the strictness both of the scope of the Court's function, as well as the parties and the issues. It was submitted that the system is not akin to curial proceedings. There were a number of fundamental differences, it was contended, which point compellingly towards the conclusion that the Costs Assessment system is not intended to be, or to operate along the lines of, a Court. Ms Castle in her submission set out 9 matters in the written submissions at [7].
(7)Accordingly it was submitted that the Costs Assessment system was intended, when introduced, to be an informal administrative system of reviewing costs.
(8)It was submitted that the defendant made a further and entirely different submission, which was wrong in law and unsupported by any authority. That was to the effect that the Cost Assessor had no jurisdiction due to the Amended Application being filed outside the 12 month period provided by s350. It was submitted that the defendant supported this submission with what could only be described as threat of legal action and the Costs Assessor took them to be such.
(9)Ultimately, after further protracted correspondence, the Costs Assessor agreed that as a result of the Amended Application being filed beyond the 12 month period, he had no jurisdiction.
It was submitted on behalf of the plaintiff that the Costs Assessor's denial of jurisdiction was a jurisdictional error.
It was further submitted that the Review Panel repeated the Costs Assessor's error and that this constitutes a jurisdictional error by the panel, namely, the panel wrongly affirmed the decision that the Costs Assessor did not have jurisdiction.
It was submitted that whilst the Application for Review focussed on the question of which version of the Act was applicable at the time, the issue of wrongful denial of jurisdiction was squarely raised and was required to be dealt with by the Panel.
In written submissions on behalf of the defendant, the following matters were relied upon by way of submissions:
iOn the question of misnomer, there was no way of drawing an analogy between the statutory scheme and the judicial process. The question as to whether or not the "client" did or did not apply under s 350 for a Costs Assessment not to be decided by questions as to whether or not an implied power of amendment existed or considering how such a matter might be dealt with by a Court: Transcripts 8 August 2011 at [P 53 L 28 to 35].
ii Whether or not there had been another corporate entity called RGIB Insurance Brokers Pty Ltd or whether there was a company of similar name with an apostrophe or not "...was not explored before the assessor and is not explored now, and it is not the sort of things that the assessor could do": Transcript 8 August 2011 at [P 54 L 5 to 14].
iiiThe material did not reveal whether the assessor enquired as to whether there are any other companies forming a group of companies. Accordingly it was open to the assessor to conclude, on the basis of the material available to him, as to the identity of the client: Transcript 9 August 2011 [P 54 L 16 to 24].
ivThe powers of Courts to allow amendments and inherent powers of Courts to do so were not relevant "...to the fundamental enquiry, which could be a result for us or against us under s 350(1) as to whether that truly was the client to make that application". Transcript 8 August 2011 at [P 54 L 25 to 30].
vThe idea of an amendment to the application appeared to have come from the assessor: Transcript 8 August 2011 at [P 56 L 20 to 25].
viCompulsive powers cannot be exercised unless there is a valid application in the first place: Transcript 8 August 2011 [P 56 L 25 to 30]. If there was not a valid application because it was in the wrong name then the only way that that could be corrected was by the filing of another application in the correct name but that an extension of time would be required: Transcript 8 August 2011 [P 56 L 31 to 37].
Consideration
In relation to the Application for the Assessment of Costs filed on
22 December 2008 the following matters are noted:
iThere was an inconsistency or discrepancy in the named Applicant, RGIB' Insurance Brokers Pty Ltd and the client identified in the Costs Agreement, Rural & General Insurance Pty Ltd.
iiThe Manager, Costs Assessment, took up the inconsistency/discrepancy with Mr Pratten before the application was referred by her to the assessor under s 357.
iiiThe Application had attached to it a copy of the Costs Agreement which specified the client as Rural & General Insurance Broking Pty Ltd.
ivThere is no dispute in the present proceedings but that Rural & General Insurance Broking Pty Ltd was in fact the "client" in relation to the APRA litigation to which the assessment lodged related.
That position was confirmed by the defendant himself in his letter of 1 May 2009 to the assessor (p 2):
"In the circumstances, there can be no doubt whatsoever that the client, being the entity to which legal services were provided, was Rural & General Insurance Broking Pty Ltd".
vThere is, and was in the present proceedings, no suggestion that there existed a group of companies of which Rural & General Insurance Broking Pty Ltd was one. There is no evidence that could have supported the proposition that one entity from the group was wrongly named as applicant instead of another (see below in relation to the question of mistaken identity and misnomer).
viThe assessor adopted the view (implicitly also accepted by the Review Panel as valid (that there would need to be an Amended Application lodged in order for him to have jurisdiction to undertake the Assessment of Costs.
There are three matters relevant to the assessor's decision (and the Review Panel's decision) as to the absence of jurisdiction. The first, is the need to determine what documents constituted "the application" lodged with the Manager, Costs Assessment. The second is whether the discrepancy in the name of the entity in the application was a misnomer or misdescription of name as distinct from a mistake as to the identity of the "client"/applicant. Thirdly, whether, even if the application lodged on
22 December 2008 required amendment as to name, whether in the circumstances that was permissible and if so necessary.
As to (i):
(1) Form 1, as prescribed by regulation, makes provision attaching a copy of the relevant Costs Agreement: see paragraph 2 which stated ("copy attached").
(2) A copy of the Costs Agreement, as earlier noted, was attached to the application and as such it formed part of the application lodged by the plaintiff.
(3) The Costs Agreement, as part of the application for the Costs Assessment, identified the relevant client as the entity, Rural & General Insurance Broking Pty Ltd, the plaintiff to the present proceedings.
(4) The attaching of a copy of the Costs Agreement in support of the application was information, in the nature of a representation, that the client and the intended applicant was one and the same.
(5) The further documents attached to and forming part of the application lodged with the Manager, Costs Assessment, were also consistent in that regard and clarified the "applicant" as being the plaintiff to the present proceedings. The documents stated and represented that the client was Rural & General Insurance Broking Pty Ltd. The documents taken as a whole, impliedly if not expressly, represented that company as the applicant to the application. Indeed the perception and the understanding of the composite documents constituting the application was clear in the Manager, Costs Assessment letter of 2 February 2009 written to Mr Pratten (see above). There the Manager stated that it would appear that "the correct applicant" was that company Rural & General Insurance Broking Pty Ltd. Reference was made in that respect to the fact of the Costs Agreement annexed to the application.
(6) The Manager, Costs Assessment, did not specify or require either the lodging of a fresh application or an Amended Application. The approach taken by the Manager, in the exercise of her discretion was that "I will treat Rural & General Insurance Broking Pty Ltd as the applicant and proceed to assign the matter to a Costs Assessor for determination". Confirmation was, as earlier stated, eventually given by Mr Pratten to the Manager.
(7) Once the matter had been referred to the assessor, the assessor would be required to proceed upon the basis determined by the Manager. The assessor, of course, was informed of what was said to be a mistake by way of misnomer. As discussed above, he had the requisite powers to require information to confirm any issue concerning the identity of the "client" and "applicant", if necessary.
(8) In proceeding on the basis determined by the Manager, Costs Assessment, there was no possibility of any irregularity or injustice to any person or party. There certainly could have been no disadvantage for the defendant. As indicated above there has never been any doubt as to who the client was or who received the relevant legal services, namely the entity to whom the defendant's invoices were directed. In the circumstances there was no requirement for a new application or an Amended Application.
(9) The application although containing the inconsistency or discrepancy referred to was an application constituted by the documents to which reference has been made above. No issue of jurisdiction was taken either by the Manager or by the assessor until raised by the defendant. If there was a misnomer, on the evidence, it was not a matter that in my opinion supports the conclusion that the assessor did not have the jurisdiction to deal with the assessment. This is so because:
i The application was made by the defendant's "client".
ii The application, read as a whole, sufficiently identified the plaintiff as the applicant.
iii All parties understood the true identity of the applicant.
iv The Costs Agreement had been made with only one entity.
I have concluded that the assessor accordingly was wrong in determining that he had no jurisdiction and was wrong in concluding that Amended Application was necessary.
As to (ii): The evidence in relation to the name of the applicant in the application for a costs assessment supports the conclusion that the name was made by mistake. In other words in all of the circumstances of the present case it was not a mistake that went beyond a misnomer or misdescription.
The mistake was a mistake in name and not as to the identity of one amongst other potential applicants. It has not been suggested that there existed any other entity who could have had standing to make an application for a costs assessment in this case.
Although there is no express power to grant leave to amend an application (assuming, of course, that leave to correct a misnomer or misdescription were required), it is relevant, in terms of determining whether or not the assessor had "jurisdiction" to have regard to the principles relating to power of courts to permit an amendment to a pleading depending upon whether the amendment relates to a mistake or goes to a question of wrong identity. In Bridge Shipping Pty Ltd v Grand Shipping SA and anor (1991) 103 ALR 607, Dawson J referred to the origin of certain rules of court (VIC) permitting amendments. There it was stated that the relevant (former) rule:
"...gave partial expression to the inherent jurisdiction of the Court to deal with misnomer or misdescription by amendment, and that the same principle being applicable in the case of plaintiffs and of defendants...what is important is the distinction between the correction of a misnomer or misdescription, which was something dealt with rule 2 (now reflected in rule 36.01), and the addition or substitution of parties for the parties originally joined, which was something dealt with by rule 1 (now reflected in rule 9.05, rule 9.06 and rule 9.07). The correction of a misnomer or misdescription does not involve the substitution of a new party except in the technical or formal sense, since the party after the correction is the same person as was misnamed or misdescribed".
In the present case it is plain that the mistake was a misnomer or misdescription of a party. That fact had readily been perceived by the Manager, Costs Assessment. The manager exercised her administrative discretion (before referring the application to the assessor) to treat it as a misnomer and that the real applicant was the entity Rural & General Insurance Broking Pty Ltd.
With the approach of the Manager in treating the misnomer as a mistake and correcting it by the method she did, no irregularity or unfairness resulted. As has been said a mistake in the name of a party is not the same thing as a mistake in the identity of that party: Evans Constructions Co Ltd v Charrington & Co Ltd [1993] QB 810 per Donaldson LJ at [80].
As to (iii): It is clear, in my opinion, that with a true misnomer in relation to an administrative process (a costs determination) there is no requirement or principle that requires an application for leave to amend or an amended application or a fresh application to cure such an error. That, as earlier noted, was the basis adopted by the Manager, Costs Assessment. The procedural considerations in relation thereto did not involve jurisdictional considerations.
Conclusions
On the basis discussed above I have concluded that the Costs Assessor erred in law in determining that he had no jurisdiction to determine the application.
I have also concluded that, for the reasons set out above, the Costs Review Panel erred in law in determining the application made to it upon the basis that the Costs Assessor has proceeded upon a correct basis. The Review Panel erred in proceeding with the review upon the basis that the plaintiff in the circumstances of the case was required to have proceeded by way of an amended Application for Costs, that because he was out of time in proceeding by way of an Amended Application the Cost Assessor's decision as to an absence of jurisdiction was correct.
I accordingly have concluded that the plaintiff has established a basis for and is entitled to the relief sought in the summons.
Order sought under s 728 of the Legal Profession Act, 2004.
An order under the above section was sought in paragraph 6 of the summons. It is noted that the order sought in the summons relates to the bill of costs which was the subject of the Application for Assessment, but also reaches back for the period commencing 26 June 2006 until completion of the matter.
Ms Castle on behalf of the plaintiff, however, properly acknowledged that, the form of order that this Court may make requires it to take into account relevant discretionary considerations. Amongst those considerations are:
iThe utility in making such an order.
iiWhether, in any event, there having been no application made in respect of bills of costs rendered prior to February 2008 an unrestricted order should be made.
iiiThe evidence as to the apparent loss of certain files and records which would impose practical problems in the defendant complying with such an order.
I am mindful of the evidence as to discussions that took place between
Mr Pratten and Goldsmiths Lawyers as to him not requiring itemised bills of costs.
Having regard to the evidence and the submissions of the parties I have come to the firm conclusion that an order in terms of paragraph 6 in the summons should not be made. In reaching that conclusion I have in particular had regard to the matters which I have set out above. An unrestricted order under s 728 would, in my assessment, operate unfairly and impose considerable hardship and expense upon the defendant.
The question then arises as to whether or not an order under s 728 ought, however, to be made in respect of the bills of costs which are the subject of the application for Costs Assessment filed or lodged on
22 December 2008. I have concluded that an order in respect of those bills of costs should be made.
In so concluding I have had regard to the evidence given, namely, the affidavits and oral evidence of both Mr Pratten and Mr Goldsmith.
In considering the matters relevant to assessment I have taken into account that the assessor himself stated in his letter of 5 April 2009 (p 2) that he required itemised bills, the subject of the application. Further, a direction was made that the defendant prepare such bills in itemised form identifying the nature of the work done, by whom the work was done, the time units claimed in respect of that work and any other particulars in support of the amount claimed for the work. The assessor also stated that he would require similar information in respect of disbursements.
In addition, the assessor in his letter of 19 May 2009 to Goldsmiths Lawyers stated that the bills of costs for assessment did not contain sufficient particulars and he referred to his letter of 5 April 2009. It is clear that the assessor had formed a firm view that itemised bills of costs were essential if a proper assessment was to be undertaken.
I have taken into account the evidence of the defendant as to the fact that certain documents (including emails) are no longer in existence and that files, previously held in storage, have been destroyed. However I accept the submissions on behalf of the plaintiff that his evidence does not preclude the existence of particular documentation and electronic records. On the evidence, such records are likely to still exist.
The availability of relevant documents is, of course, relevant to the exercise of the discretion in respect of the relief sought. Ms Castle submitted that the evidence established the defendant lacked a proper system for maintaining a record of relevant documentation and for the maintenance of documents and that on the defendant's evidence there had been an unsupervised destruction of documents that had been held for seven years or more. The failure included a failure to require staff to maintain lists of documents said to have been shredded.
The submission for the plaintiff was that a solicitor should not, in relation to an application for an order under s 728 be able to rely upon lack of a proper system and/or supervision as a reason against the making of such an order. In general terms I accept that submission.
I accept that the evidence does reveal that there is still a reasonable basis to believe the defendant can access information and records. This includes the MYOB database, ledgers and copies of letters written on letterhead and other forms of communication.
Ms Castle also submitted that the application for an order under s 728 order is to be considered in light of the fact that the plaintiff has never received what was referred to as an appropriate amount of itemisation of costs charged (Transcript 18 August 2011 at p 160) and it was contended Mr Pratten was effectively discouraged by the defendant from seeking any itemisation of costs that would facilitate an assessment being made of costs. Specific reference was made to correspondence in evidence. This included a letter from the defendant to Mr Pratten dated 17 October 2006 (exhibit 4) (p 2). It was there stated that the defendant said "I have no intention of changing my accounting or billing system for you, or indeed for any other client". The submission also asserted that it was made clear to Mr Pratten that if he wanted him to have a bill of costs assessed then he could apply for a formal assessment under the Act for an order in that respect. Reliance was also placed upon the letter written by Mr Pratten to the defendant dated 11 October 2006 (Annexure "H") to Mr Pratten's affidavit sworn on 23 December 2010 in which he raised the question of obtaining more detailed information concerning costs.
In evaluating the discretionary consideration for and against the relief sought in the terms of paragraph 6 I have concluded that an appropriate form of order under s 728 (as set out below) represents a proper exercise of the discretion. Relevant discretionary factors in this respect include:
a The order which is to be made in the nature of prerogative relief quashing the decision of the assessor and the Review Panel.
b The perceived requirement by the assessor stated in letters written by him that an itemised bill of costs is a practical requirement to enable an assessment of costs to be undertaken.
c The evidence that suggests that there is utility in the making of such an order.
d The time and cost to the defendant in complying with the order will be limited in contrast to what would be required if a broader form of order was made.
Orders
I make the following orders:
(10) A declaration that the Costs Assessor, John Hope Gibson erred in law in his decision on 11 November 2009 by determining that he had no jurisdiction to assess the Application for Assessment of Costs lodged on 22 December 2008.
(11) An order quashing the Certificate of Determination of Costs Assessor John Hope Gibson issued on 11 November 2009.
(12) A declaration that the Review Panel erred in law in affirming the Costs Assessor's determination that he had no jurisdiction or power and in determining in its Reasons for Determination on 15 September 2010 that the Costs Assessor's reasons were correct and should not be disturbed.
(13) An order quashing the Certificate of Determination of Costs by Costs Review Panel issued on 15 September 2010.
(14) An order that the Certificate of Determination of Costs of Review issued by the Review Panel on 15 September 2010 in the sum of $1,405.25 in Costs Review No 2008/00020713 be set aside.
(15) A declaration that the Costs Assessor had jurisdiction to determine the Application for Assessment of Costs filed in costs assessment 2008/00020713.
(16) An order pursuant to s 728 of the Legal Profession Act 2004, that the defendant give to the plaintiff an itemised bill of costs in respect of legal services provided by the defendant in the matter of Rural & General Insurance Broking Pty Ltd v Australian Prudential Regulation Authority for the period to which the bill of costs, the subject of Costs Assessment 2008/00020713, relates.
Costs
As the plaintiff has succeeded in obtaining the orders set out above it would ordinarily be entitled to costs of the proceedings. Unless the defendant wishes to lodge written submissions disputing an entitlement in the plaintiff to costs on the costs-follow-the-event basis, and does so within 14 days of the date of these orders, the order otherwise is that the defendant is to pay the plaintiff's costs of the proceedings on the ordinary basis.
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Amendments
28 May 2012 - The seventh sub-paragraph of paragraph 66, beginning with the words "The Manager, Costs Assessment, did not specify or require either the lodging of a fresh application..." was mistakenly numbered as (4). It is now amended to read as (7). The subsequent sub-paragraphs originally numbered (5), (6), and (7) are renumbered to read as (8), (9), and (10) repectively.
Amended paragraphs: 66
Decision last updated: 01 June 2012
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