TH Drake & Associates Pty Ltd v Safaei

[2022] NSWSC 1008

Supreme Court

New South Wales

Medium Neutral Citation:

TH Drake & Associates Pty Ltd v Safaei [2022] NSWSC 1008

Hearing dates:

4 March 2022

Date of orders:

24 August 2022

Decision date:

24 August 2022

Jurisdiction:

Common Law

Before:

Walton J

Decision:

(1) The Notice of Motion filed 11 September 2021 is dismissed.

(2) The plaintiff is to pay the defendant’s costs of the Notice of Motion.

Catchwords:

CIVIL PROCEDURE – transfer of proceedings from Local Court and District Court to Supreme Court – Civil Procedure Act 2005 (NSW) s 140 – Legal Profession Uniform Law Application Act 2014 (NSW) s 89(3A) – whether matters are serious or complex, or which require the protective function of this Court, or have a public interest component – transfer order refused

COSTS – proper construction of Legal Profession Uniform Law (NSW) ss 178 and 185 – whether “void” in Uniform Law is void in futuro or void ab initio

Legislation Cited:

Civil Procedure Act2005 (NSW), ss 56, 140

Courts and Crime Legislation Amendment Act 2008 (NSW)

Courts and Other Justice Portfolio Legislation Amendment Act 2015 (NSW), Sch 1.13 cl [3]

District Court Act 1973 (NSW), s 127

Legal Profession Act 2004 (NSW), ss 384, 385

Legal Profession Uniform Law (NSW), Pt 4.3 Divs 3, 4; ss 174, 178, 185, 193, 198, 200

Legal Profession Uniform Law Application Act 2014 (NSW), ss 4, 89

Legal Profession Uniform Law Application Act 2014 (Vic), Sch 1

Legal Profession Uniform Law Application Regulations 2015 (NSW), reg 34

Supreme Court Act1970 (NSW), ss 69, 118

Uniform Civil Procedure Rules 2005 (NSW) r 49.4

Cases Cited:

Bevan v Bingham [2022] NSWSC 863

Cai v Guo [2014] NSWSC 380

Ex parte Delponte; Re Thiess Bros Pty Ltd [1965] NSWR 1468

Ex parteDusmanovic [1967] 2 NSWR 125

Ex parte Vigilant Finance (NSW) Pty Ltd; Re Cameron Smith [1964] NSWR 1282

George Pearce Pty Ltd v O’Flynn [1963] NSWR 102

KBRV Resort Operations Pty Ltd v Chilcott (2001) 51 NSWLR 516; [2001] NSWCA 116

Marincic v State of New South Wales [2017] NSWSC 272

Martinez v Al Maha [2021] NSWSC 932

McCormick v BP Australia Ltd [2003] NSWSC 690

Re Murray; Ex parte Hillman [1961] NSWR 573

Ritchie v Gumley (1954) SR (NSW) 334

Ryner v Roller [2007] NSWSC 372

Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924

Scarlett Anne Robinson bhnf Anthony James Robinson v Riverina Equestrian Association Inc [2022] NSWSC 953

SW v The Sydney Children’s Hospitals Network t/as Westmead Children’s Hospital [2022] NSWSC 293

Wende v Horwath (No 2) (2015) 91 NSWLR 588; [2015] NSWCA 416

Wende v Horwath(NSW) Pty Ltd (2014) 86 NSWLR 674; [2014] NSWCA 170

Category:

Costs

Parties:

TH Drake & Associates Pty Ltd (trading as Drake & Associates) (Plaintiff)
Amir Khezr Safaei Manesh (also known as Amir Safaei) (First Defendant)
Manager, Costs Assessment (Second Defendant, submitting appearance)

Representation:

Counsel:
CJ Bevan (Plaintiff)
JC McDonald (First Defendant)

Solicitors:
TH Drake & Associates Pty Ltd (Plaintiff)
Cronin James McLaughlin Lawyers (First Defendant)
NSW Crown Solicitor’s Office (Second Defendant)

File Number(s):

2021/00259148

Judgment

1. By a Notice of Motion filed on 10 September 2021, the plaintiff, TH Drake & Associates Pty Ltd, sought to transfer two sets of proceedings, one from the Local Court of New South Wales and the other from the District Court of New South Wales to this Court (“the Transfer Motion”), in order for them to be heard concurrently with the plaintiff’s application for judicial review of three decisions by the Manager, Costs Assessment (“the Manager”).

2. The essence of the judicial review proceedings concerns three applications by the plaintiff for costs assessments on 20 October 2020, 30 October 2020 and 1 June 2021. On 21 October 2020, 30 October 2020 and 1 June 2021, the Manager determined that the applications were filed out of time; that he had no power to extend the time permitted in s 198(3)(a) of the Legal Profession Uniform Law (NSW) (“Uniform Law”); and, that he had no power to refer those applications for assessment by an assessor for determination under reg 34(2)(d) of the Legal Profession Uniform Law Application Regulations 2015 (NSW) (“the LPULA Regs”). The plaintiff also sought declaratory relief that the application for the costs assessments were filed within time.

THE PROCEEDINGS

The Local Court Proceedings

3. The background to the Local Court proceedings 2020/144165 was as follows.

4. The plaintiff received instructions and commenced representing Amir Khezr Safaei Manesh (also known as Amir Safaei, who is the first and only active defendant in the present proceedings and who I will refer to as “the defendant”), as his solicitor, on 19 November 2015 in relation to relief for a property settlement and custody and access rights in relation to children and property. The plaintiff opened two separate files, one for the property matter and the other for the matter concerning the children. He billed the defendant according to the work performed in those specific matters within the retainer.

5. A tax invoice (numbered 0830) was issued on 31 July 2018 in the amount of $24,175.50 for work undertaken between 22 February 2016 to 20 July 2018 in the matter about the children. Another tax invoice (numbered 10831) was issued on 31 July 2018 in the amount of $72,896.50 for work undertaken between 19 November 2015 to 31 July 2018 in the matter concerning property.

6. On 18 March 2020, $8,200.00 was paid towards outstanding costs. An amount of $3,979.50 was credited to the tax invoice issued on 5 February 2016 and the balance of $4,220.50 to invoice no. 10831, reducing the amount due on that invoice to $20,755.00.

7. On 14 May 2020, the plaintiff commenced an action in the Local Court against the defendant for unpaid legal fees in the amount of $93,651.50 together with interest, fees, and costs.

8. On 16 September 2020, the defendant filed a Notice of Motion to dismiss or stay the claim. That motion was dismissed and consent orders were made. The consent order included notations of an agreement that:

1. The plaintiff would apply for a costs assessment of his invoices that were the subject of the Local Court proceedings. Such assessment which would be consented to by the defendant.

2. Should the plaintiff’s application for costs assessment be denied, the defendant would apply for a costs assessment within 7 days of the notification.

9. Proceedings in the Local Court were defended by the defendant, in part, on the basis that the plaintiff’s costs disclosure and costs agreement, pursuant to which the plaintiff charged the defendant fees for legal services, was void ab initio, pursuant to s 178(1)(a) of the Uniform Law, due to the plaintiff’s failure to provide the defendant with an updated costs assessment in accordance with s 174(1)(b) of the Uniform Law.

10. The Local Court proceedings were listed to be heard on 18 February 2022, however, as a result of the motion filed by the plaintiff in the Local Court that hearing date was vacated, the Local Court proceedings were listed for directions on 11 April 2022 and listed for hearing in the Local Court on 30 August 2022 if the motion for transfer was dismissed.

11. I note that the applications for costs assessment by the plaintiff which were refused by the Manager concerned the invoices which were the subject of the Local Court proceedings.

The District Court Proceedings

12. The District Court proceedings 2021/185508 are an appeal by the defendant under s 89(1)(a) of the Legal Profession Uniform Law Application Act 2014 (NSW) (“Application Act”) from a decision of the Review Panel.

13. That decision related to a costs assessment application made by the plaintiff in May 2020 concerning five invoices issued to the defendants. These five invoices are different to the invoices that are the subject of the Local Court proceedings, although both sets of invoices relate to work done by the plaintiff in respect of the defendant’s Family Court proceedings.

14. On 20 October 2020, the Costs Assessor determined that $92,101.29 of costs, together with $2,602.05 of costs of the assessment, were due and payable by the defendant.

15. On 18 November 2020, the defendant sought review of that decision by a Review Panel. On 1 June 2021, the Review Panel affirmed the decision of the Costs Assessor but varied the decision concerning the costs of that assessment and ordered that those costs be split 50-50 between the plaintiff and the defendant (“the Review Panel decision”).

16. On 28 June 2021, the defendant appealed the Review Panel’s decision. By an Amended Summons commencing an appeal dated 31 August 2021 (“the Amended Summons”), the defendant relied upon the following grounds to, inter alia, to set aside a decision of the Review Panel:

1 The review panel erred in affirming the assessment of the cost assessor in, and itself, assessing the fair and reasonable costs of the Respondent were those costs comprised in the [plaintiff’s] invoices under review because:

a. Section 185(2) of the Legal Profession Uniform Law prohibits a law practice recovering costs on assessment that exceed those that would be otherwise recoverable under a void cost agreement;

b. The costs contained in the invoices under assessment had been invoiced at rates higher than those provided in the void cost agreement, and some items had been charged at incorrect rates.

2 The review panel failed to properly exercise the discretion conferred by section 200(2)(b) of the Legal Profession Uniform law by:

a. Failing to take into consideration, in determining the fair and reasonable costs, the significant failure by the [plaintiff] to comply with its obligations to disclosure to the Applicant the anticipated total costs pursuant to Division 3 of Part 4.3 of the Legal Profession Uniform law;

b. Failing to assess the fair and reasonable costs having regard to the significant of that failure.

RELEVANT PRINCIPLES

17. There was no dispute as to the relevant principles identified by the plaintiff which I consider to be broadly correct and are incorporated into the discussion below:

1. A power to order that proceedings in the District and Local Court be transferred in this Court is found in s 140 of the Civil Procedure Act2005 (NSW) (“CPA”) which is in the following terms:

140 Transfer of proceedings to higher court

(1) The Supreme Court may, of its own motion or on application by a party to proceedings before the District Court or the Local Court, order that the proceedings, including any cross-claim in the proceedings, be transferred to the Supreme Court.

2. The plaintiff also relied upon the provisions of s 89(3A) of the Application Act. I will return to that provision which, it may be noted, is confined to an appeal in the District Court.

3. The power to transfer into this Court the two proceedings in each of the lower courts is discretionary: Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924 at [4] (Bryson J). The relevant test is what is appropriate in all the circumstances and having regard to the matters in issue in each of the lower court proceedings: see Scarlett Anne Robinson bhnf Anthony James Robinson v Riverina Equestrian Association Inc [2022] NSWSC 953 at [8]-[9] (Walton J); McCormick v BP Australia Ltd [2003] NSWSC 690 at [20] (Master Malpass).

4. The overriding consideration in the exercise the discretion to transfer up the lower court proceedings is the existence of “sufficient reason for hearing the proceedings in the higher court”. This is self-evidently a very broad test which creates an equally broad discretion to order the transfer up into the higher Court of the proceedings pending in the lower courts.

5. The relevant legal principles in relation to an application under s 140 of the Act were recently summarised by Harrison AsJ in SW v The Sydney Children’s Hospitals Network t/as Westmead Children’s Hospital [2022] NSWSC 293 at [53]–[54] as follows:

[53] In BOC v MDL [2019] NSWSC 278, Hoeben CJ at CL summarised the relevant legal principles that apply to an application pursuant to s 140 of the Civil Procedure Act. His Honour at [17]–[19] stated:

“Legal principles

[17] In exercising the discretion conferred by s 140 of the Civil Procedure Act, it is necessary for the Court to consider all relevant facts and circumstances (Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924 at [4], Bryson J; Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2006] NSWSC 631, Campbell J).

[18] The applicant for transfer bears the onus of satisfying the Court that there is “sufficient cause”, “sound ground” or “good reason” to transfer the proceedings so that justice is best served between the parties: Sanderson Motors at [3]-[4]; Parry v WGE Engineering Pty Ltd [2003] NSWSC 337 at [3].

[19] In Rinbac Pty Ltd v The Owners - Strata Plan No 64972 [2010] NSWSC 656; 77 NSWLR 601 Brereton J (as he then was) said at [11]:

“[11] The purpose of the Civil Procedure Act, s 140, is to permit the removal from a lower court to a higher court of proceedings where there is good reason to do so. Typically, that has been where there has been a risk that a jurisdictional limit affecting the lower court would be exceeded, where there are complex and important issues, and where the proceedings involve allegations of significant notoriety or public importance.”

[54] In Hau Shan v Fairfield City Council [2020] NSWSC 681, Button J at [14] said:

“[14] I think that the issue here is an assessment on my part in a broad sense of the likelihood of this claim succeeding in going beyond the District Court's jurisdiction. Patently, one would reject out of hand, as a matter of theory and practice, the idea that the work of the Supreme Court would be clogged up by matters that, for some reason or other, are sought to be either commenced here or transferred here when it is perfectly clear that a lower Court is ready, willing and able to deal with the matter, and to do justice in the matter.”

6. In Marincic v State of New South Wales [2017] NSWSC 272, Button J stated at [13] that:

[13] Seventhly, I remain of the view, expressed by me in Pelka v Woolworths Limited [2016] NSWSC 1312, that the sub-paragraph must be read in accordance with s 56 of the Act. In particular, I consider that the possibility of a plaintiff being denied his full measure of damages according to law, simply because his solicitor has commenced proceedings in a court subsequently found to be inappropriate, is firmly contrary to the mandate to do justice to be found in that section.”

7. This “sufficient reason” permits a wide range of considerations, and those considerations include impressionistic matters and an evaluation of the matters in issue in each of the lower courts: see Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924; George Pearce Pty Ltd v O’Flynn [1963] NSWR 102; Ex parte Vigilant Finance (NSW) Pty Ltd; Re Cameron Smith [1964] NSWR 1282.

8. Further, plainly the defendant is correct to emphasise that the Court’s discretion to transfer must be exercised in accordance with the overriding purpose in s 56 of the CPA.

9. Absence of jurisdiction in the lower court provides a reason for a transfer up to the higher court: see Ex parte Delponte; Re Thiess Bros Pty Ltd [1965] NSWR 1468; KBRV Resort Operations Pty Ltd v Chilcott (2001) 51 NSWLR 516; [2001] NSWCA 116 at 526 [33] (Sheller JA, with whom Ipp and Grove AJJA agreed); Cai v Guo [2014] NSWSC 380.

10. The possibility of inconsistent findings of fact and law – either as between the two lower courts themselves or as between the two lower courts, on the one hand, and this Court, on the other hand – warrants the transfer of the two pending lower court proceedings into this Court: see Ritchie v Gumley (1954) SR (NSW) 334; Re Murray; Ex parte Hillman [1961] NSWR 573; Ryner v Roller [2007] NSWSC 372.

11. The possibility of findings by the lower courts on the proper interpretation of provisions in the cost’s regime in the Uniform Law which affects the rights of all legal practitioners and clients warrants a transfer of the lower court proceedings into this Court, so that a court of superior record can determine the proper interpretation of these provisions of the Uniform Law: see Ex parte Dusmanovic [1967] 2 NSWR 125.

18. It is convenient to set out the entirety of s 89 of the Application Act, which is as follows:

89   Appeal on matters of law and fact

(1)  A party to a costs assessment that has been the subject of a review under this Part may appeal against a decision of the review panel concerned to—

(a)  the District Court, in accordance with the rules of the District Court, but only with the leave of the Court if the amount of costs in dispute is less than $25,000, or

(b)  the Supreme Court, in accordance with the rules of the Supreme Court, but only with the leave of the Court if the amount of costs in dispute is less than $100,000.

(2)  The District Court or the Supreme Court (as the case requires) has all the functions of the review panel.

(3)  The Supreme Court may, on the hearing of an appeal or application for leave to appeal under this section, remit the matter to the District Court for determination by that Court in accordance with any decision of the Supreme Court and may make such other order in relation to the appeal as the Supreme Court thinks fit.

(3A)  The Supreme Court may, before the conclusion of any appeal or application for leave to appeal under this section in the District Court, order that the proceedings be removed into the Supreme Court.

(4)  An appeal is to be by way of a rehearing, and fresh evidence or evidence in addition to or in substitution for the evidence before the review panel or costs assessor may, with the leave of the Court, be given on the appeal.

19. Both parties drew attention to the lack of direct authority as to the operation of this provision, in the context of a parallel power to transfer proceedings in the District Court under s 140 of the CPA.

20. Similarly, both parties referred to the second reading speech of the Attorney General as to the enactment of ss 89(1)–(3A) of the Application Act in the Courts and Other Justice Portfolio Legislation Amendment Act 2015 (NSW) (“COJPLA Act”).

21. Counsel contended that it would appear that the removal of a matter under s 89(3A) would seem to be directed to costs assessment cases where there are matter of complexity, seriousness or a public importance. Whilst the exercise of the discretion of the Court under that provision need not necessarily be constrained to those factors, there is substance in the parties’ submissions that those considerations would be certainly be of some real significance in the exercise of discretion.

22. My approach in this respect is influenced by the submission of counsel for the defendant as to operation of s 89(3A) of the Application Act which is of substance. That submission is in the following terms:

3. The origins of s 89(3A) may be sourced to the precursor of s 89 of the LPULA Act, namely ss 384 and 385 of the Legal Profession Act 2004 (LPA). Those provisions provided:

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

(1) A party to an application for a costs assessment 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 District Court, appeal to the Court against the decision.

(2) After deciding the question the subject of the appeal, the District 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.

385 Appeal against decision of costs assessor by leave

(1) A party to an application for a costs assessment relating to a bill may, in accordance with the rules of the District 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 for a costs assessment 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 District 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 District 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.

4. Thus, under the LPA, there was an appeal as of right to the District Court as to a matter of law arising in the proceedings to determine the application, regardless whether the decision concerned practitioner/client costs or court ordered costs; while an appeal concerning matters of fact or mixed questions of law and fact required leave of either the District Court (if the matter concerned a practitioner/client bill) or of the Court which made the order for costs (if the matter concerned court ordered costs): McCausland v. Surfing Hardware International Holdings Pty Limited [2010] NSWDC 222.

5. An appeal is a remedy conferred by statute. It is not a common law remedy: The South Australian Land Mortgage and Agency Company Limited v Taylor (1922) 30 CLR 523. This being the case, only those courts bestowed with jurisdiction to hear appeals from decisions of costs assessors/costs review panels, can hear such appeals.

6. Although s 140 of the CPA permits the transfer of District Court proceedings to the Supreme Court, such a transfer will not be permitted where the Supreme Court does not otherwise have jurisdiction to hear the matter. This was explained by Brereton J in Rinbac Pty Ltd v Owners Corporation Strata Plan 64972 [2010] NSWSC 656; 77 NSWLR 601 (Rinbac). In Rinbac, the plaintiff filed a summons in the District Court seeking leave to appeal from a decision of the Consumer Trade and Tenancy Tribunal (CTTT) on the basis of a statutory right of appeal granted by s 200 of the Strata Schemes Management Act, which relevantly provided:

"An appeal lies to the District Court against an order made by the Tribunal under this Chapter."

7. Because of the novelty and complexity of the issues raised in the appeal, Rinbac then filed a summons in the Supreme Court seeking an order that the matter be transferred to the Court pursuant to s 140 of the CPA. Brereton J held that the terms of s 200 of the Strata Schemes Management Act provided that an appeal from the CTTT was to be determined by the District Court and said, at [11]-[12]:

"The purpose of Civil Procedure Act, s 140, is to permit the removal from a lower court to a higher court of proceedings in the lower court where there is good reason to do so. Typically, that has been where there has been a risk that a jurisdictional limit affecting the lower court would be exceeded, where there are complex and important issues, and where the proceedings involve allegations of significant notoriety or public importance. But there is nothing in or about s 140 which confers on a transferee court additional jurisdiction that it does not otherwise have. This is to be distinguished, for example, from s 149 (which, in the case of a transfer from a higher court to a lower court, gives the lower court all the relevant jurisdiction of the higher court), and similarly, s 149E (which in the case of transfer of proceedings between the Supreme Court and the Land and Environment Court, gives the transferee court all the jurisdiction of the transferor court). But as I have said, there is nothing in connection with transfers from a lower court to a higher court that gives the higher court jurisdiction that it did not otherwise have.

The jurisdiction to entertain an appeal under s 200 of the Strata Schemes Management Act is plainly given to the District Court and only to the District Court. It is a statutory right of appeal, defined by the terms of the statute that creates it. In my view, the Supreme Court cannot give itself jurisdiction to hear such an appeal by removing the proceeding from the District Court into the Supreme Court."

8. Rinbac was approved and followed by Adamson J in Singh v The Owners – Strata Plan 11723 [2012] NSWSC 519, with her Honour succinctly noting at [31] that the Court “has no jurisdiction to appropriate to itself jurisdiction which Parliament has expressly conferring on another Court.”

9. While counsel for the defendant has not been able to locate a decision along similar lines concerning s 385 and/or s 385 of the LPA, the principle expressed in Rinbac would prevent the transfer to the Supreme Court of appeals brought pursuant to s 384 or s 385(1) or, under s 385(2), if the Supreme Court was not the court or tribunal that made the order for costs.

10. The Second Reading Speech of the Hon. Gabrielle Upton, Attorney-General, in respect of the Courts and Other Justice Portfolio Legislation Amendment Bill 2015 which introduced s89(3A) into the LPULA Act, makes clear that the legislature did not wish the Supreme Court’s supervisory jurisdiction over legal practitioners to be ousted, as had happened, perhaps unwittingly, under the LPA1:

Subclause 1.13 [3] provides that appeals against reviews of costs assessment decisions may be made to the District Court if the amount of costs in dispute is more than $25,000, or by leave if it is less. Additionally, appeals may be made to the Supreme Court if the amount in dispute is more than $100,000. Otherwise, leave is required. Currently, almost all costs assessment appeals go to the District Court. This amendment will reinstate the supervisory jurisdiction of the Supreme Court over practitioner’s costs and will ensure that the Supreme Court has the power to hear the more significant or complex costs assessment appeals. As I said, the amendments were proposed by the Chief Justice to improve the costs assessment procedures in New South Wales. Costs assessment is generally used where a dispute arises between a client and law firm about a bill of costs, or where parties to proceedings have a costs order made.2

11. In circumstances where the Supreme Court will have jurisdiction to hear an appeal from a decision of a review panel if the dispute is under $100,000, if it grants leave, (s 89(1)(b)) it seems that s 89(3A) has been included to allow the removal of either an appeal or application for leave to appeal from the District Court to the Supreme Court without the Supreme Court first needing to grant leave to appeal to allow that to occur – a process which may not be appropriate where there is only an application for leave to the District Court and/or where the District Court has already granted leave to appeal.

12. While little guidance is provided as to the criteria which would indicate the removal of a matter pursuant to s 89(3A), it seems clear from the remarks of the Attorney-General that it is intended that only matters of some seriousness or complexity or which require the protective function of the Court, would be transferred. This may include matters that have a public interest component.

RELEVANT LEGISLATIVE PROVISIONS

23. Section 178(1) of the Uniform Law provides:

(1) If a law practice contravenes the disclosure obligations of this Part—

(a) the costs agreement concerned (if any) is void; and

(b) the client or an associated third party payer is not required to pay the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority; and

(c) the law practice must not commence or maintain proceedings for the recovery of any or all of the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority or under jurisdictional legislation; and

(d) the contravention is capable of constituting unsatisfactory professional conduct or professional misconduct on the part of any principal of the law practice or any legal practitioner associate or foreign lawyer associate involved in the contravention.

(2)  In a matter involving both a client and an associated third party payer where disclosure has been made to one of them but not the other, this section—

(a)  does not affect the liability of the one to whom disclosure was made to pay the legal costs; and

(b)  does not prevent proceedings being maintained against the one to whom the disclosure was made for the recovery of those legal costs.

24. Section 185(1) of the Uniform Law provides:

(1)  A costs agreement that contravenes, or is entered into in contravention of, any provision of this Division is void.

Note

If a costs agreement is void due to a failure to comply with the disclosure obligations of this Part, the costs must be assessed before the law practice can seek to recover them (see section 178(1)).

25. Section 193(2) of the Uniform Law provides as follows:

(2)  Legal costs that are the subject of an interim bill may be assessed under Division 7, either at the time of the interim bill or at the time of the final bill, whether or not the interim bill has previously been assessed or paid.

26. Sections 198(3) and (4) of the Uniform Law provide as follows:

(3)  An application under this section must be made within 12 months after—

(a)  the bill was given to, or the request for payment was made to, the client, third party payer or other law practice; or

(b)  the legal costs were paid if neither a bill nor a request was made.

(4)  However, an application that is made out of time may be dealt with by the costs assessor if the designated tribunal, on application by the costs assessor or the client or third party payer who made the application for assessment, determines, after having regard to the delay and the reasons for the delay, that it is just and fair for the application for assessment to be dealt with after the 12-month period.

27. Section 200 of the Uniform Law provides:

200   Factors in a costs assessment

(1)  In considering whether legal costs for legal work are fair and reasonable, the costs assessor must apply the principles in section 172 so far as they are applicable.

(2)  In considering whether legal costs for legal work are fair and reasonable, the costs assessor may have regard to the following matters—

(a)  whether the law practice and any legal practitioner associate or foreign lawyer associate involved in the work complied with this Law and the Uniform Rules;

(b)  any disclosures made, including whether it would have been reasonably practicable for the law practice to disclose the total costs of the work at the outset (rather than simply disclosing charging rates);

(c)  any relevant advertisement as to the law practice’s costs or the skills of the law practice or any legal practitioner associate or foreign lawyer associate involved in the work;

(d)  any other relevant matter.

(3)  The costs assessor must take into account the incidence of GST in a costs assessment.

(4)  In conducting an assessment of legal costs payable by a non-associated third party payer, the costs assessor must also consider whether it is fair and reasonable in the circumstances for the non-associated third party payer to be charged the amount claimed.

SUBMISSIONS

The Plaintiff’s Submissions

28. The plaintiff prepared two written submissions. The first was described as “Plaintiff’s Outline of Submissions (No 1)” and in substance concerned the plaintiff’s merit submissions as to the respective Supreme, District and Local Court proceedings.

29. The second submission was entitled “Plaintiff’s Outline of Submissions (No 2)”. The plaintiff made submissions specifically directed to the Transfer Motion. It was submitted that the extent of the issues made by the summons are relevant to the exercise of a discretion to transfer under s 140(1) of the CPA. To transfer each of the lower court proceedings into this Court, the Plaintiff’s Outline of Submissions (No 1) were cross-referenced with the Plaintiff’s Outline of Submissions (No 2).

30. The plaintiff’s submissions as to the transfer differed as between the Local Court and the District Court. Each will be addressed separately below.

Supreme Court

31. In summary, the plaintiff made the following submissions regarding the Supreme Court proceedings:

1. The submission by the defendant that the proceedings in this Court are narrow in scope fails to appreciate that the costs that are subject of the Local Court proceedings are the same legal costs that are the subject of the decision of the Manager, the subject of judicial review.

2. There is, however, a challenge to the Manager’s decision which revolves around s 198(3) of the Uniform Law, when read in conjunction with s 193. Primarily, the issue raised was whether the expression “bill” means tax invoices under assessment or the final bill (see s 193).

3. It was accepted that, unless the respective costs in an issue in the District Court and this Court were combined, the threshold for an appeal as of right to this Court under s 89(1)(b) of the Application Act was not reached with respect to the costs in issue in either the District Court appeal or the judicial review proceeding in this Court.

4. The Local Court proceeding was merely a “fallback case”, in the event that the review of the decision of the Manager fails.

5. If the Manager’s decision (to refuse to accept for filing the plaintiff’s Application for Assessment) is set aside by this Court, the Local Court proceeding necessarily needs to be dismissed. It is an alternative method for seeking the recovery of the same costs which are the subject of the proposed Application for Assessment. The only issue in respect of the Local Court proceeding which would then arise for determination in this Court, if the Manager’s decision is to be set aside on review, is the question of who should pay the costs of the Local Court proceeding. Thus, the Local Court proceeding only arose for determination in this Court, following a transfer into this Court, if the decision of the Manager (refusing to accept the proposed Application for Assessment for filing and to allocate it to an assessor) is affirmed on review.

6. It was for these reasons that, during oral argument, counsel for the plaintiff accepted that, if the District Court proceedings were transferred to this Court, the Local Court proceedings were effectively redundant (and therefore the transfer application redundant), save as to the costs of the Local Court proceedings themselves which can be dealt with in that court.

7. It follows that the grant of the transfer motion will avoid a multiplicity of proceedings.

8. There is a self-evident interrelationship at both an evidentiary level and at the level of legal principle involving interpretation of central provisions of the Application Act assessment regime.

9. The only reason the District Court proceedings were not commenced in this Court is because the defendant chose to commence the proceedings in the District Court. Notwithstanding that he could have appealed to this Court to conduct his appeal, albeit with leave. It would then have been a definitive resolution of the proceedings.

District Court Proceedings

32. The following submissions were made in support of the transfer of the District Court proceedings:

1. The District Court proceeding raises issues about the proper interpretation and application of those provisions of Part 4.3 the Uniform Law which regulate disclosure, billing, recovery, and assessment of legal costs by legal practitioners from their clients.

2. The following issues raised in the District Court proceedings are of importance to all legal practitioners and their clients:

1. An issue is raised in the appeal to the District Court from the Review Panel about the proper interpretation of s 198(4) of the Uniform Law which this Court has not considered or expressed an opinion on to date: see Ex parte Dusmanovic [1967] 2 NSWR 125.

2. An issue is raised about the validity of the (first) costs agreement under ss 178(1)(a) and 185(1) of the Uniform Law (in both the Local Court and the District Court), which raises the prospect of inconsistent findings of fact and law on the validity of the (first) costs agreement for the purposes of assessing the fair and reasonable costs of the plaintiff. The issue raised as to non-disclosure under s 178(1)(a) is whether a costs, void for non-disclosure, were void in futuro or ab initio (“the voiding issue”). Section 185 may provide that the costs agreement is void ab initio but the question arises as to the consequence of voiding under s 178 where a practitioner fails to update his retainer over time.

3. In oral submissions in reply, the plaintiff submitted that the amendment of the summons in the District Court appeal raised a fresh issue by focusing on s 185(1) rather than s 178(1)(a). The significance of that change was that s 185(2) potentially “locks” the practitioner into the initial costs agreement. The assessment under s 178(1)(b) and (c) is not available. It was submitted that s 185(1) may result in non-disclosure within a costs agreement rendering the costs agreement void ab initio. There is no authority on these questions. As to the plaintiff failing to file a cross-appeal, the plaintiff could, if a transfer is granted, file a contention as to the operation of ss 178 and 185 (the defendant noted that he would oppose such a course).

4. The District Court is exercising, pursuant to s 89(1)(a) of the Application Act, a parallel jurisdiction to that which is exercised by this Court under s 89(1)(b) of the Application Act, so that the appeal to the District Court could have been commenced in this Court with leave pursuant to s 89(1)(b) of the Application Act. (Leave is required to commence the appeal in this Court in the first instance because the amount in issue in the original Application for Assessment and Application for Review to the Review Panel is below the jurisdictional threshold for an appeal to this Court as of right, in that the amount in issue on the appeal to the District Court is $1,080 (or 1%) below the threshold of $100,000 for an appeal lying to this Court lying as of right.

5. However, this appeal to the District Court raises several questions of statutory interpretation in respect of which there is either no judicial opinion of a judge of this Court or where the only opinion is given by an Associate Judge of this Court; the questions of statutory interpretation which the appeal raises are of fundamental importance to all legal practitioners and clients in this State on their cost’s rights. There is an absence of binding judicial determination on the effect of a cost’s agreement void by the operation of s 178(1)(a) or s 185(1) of the Uniform Law.

6. A binding interpretation of s 178(1)(a) affects the whole of the retainer not just half. Section 56 of the CPA then pointsto the District Court proceedings being brought before this Court. There is no relevant authority on the voiding issue at this time.

7. There is no right of appeal from the determination of the District Court appeal (see s 127 of the District Court Act 1973 (NSW)). There is a limited availability for judicial review, pursuant to s 69 of the Supreme Court Act1970 (NSW) (“Supreme Court Act”) by a party to an appeal to the District Court under s 89(1)(a) of the Application Act: Wende v Horwath(NSW) Pty Ltd (2014) 86 NSWLR 674; [2014] NSWCA 170 at 679-680 [5]–[13] (Beazley P, as Her Excellency then was), 681-683 [22]–[31] (Basten JA), 701-704 [122]-[133] (Barrett JA) (“Wende (No 1)”). And see also Wende v Horwath (No 2) (2015) 91 NSWLR 588; [2015] NSWCA 416 at 593-594 [15]–[20] (Beazley ACJ, as Her Excellency then was, with whom Adamson J agreed) (“Wende (No 2)”).

3. There is an objective connection between the appeal in the District Court by the defendant, in respect of the quantification of the second half of the costs billed to the defendant by the plaintiff under his retainer of the plaintiff in the same Family Court proceeding, on the one hand, and the quantification of the costs billed to him in the first half of his retainer of the plaintiff in the very same Court to conduct the same proceeding, that is, costs which are the subject of the decision of the Manager, on the other hand.

4. These two inferior court cases are factually the same case because they concern the quantification of two halves of the legal costs billed to the defendant in respect of the same retainer the plaintiff by the defendant of and they involve the costs of the performance of different stages of the same Family Court litigation with his ex-wife.

5. The parties reached an agreement to stay the Local Court proceedings so that the plaintiff could have costs assessed for the purposes of s 198(4) of the Uniform Law. However, the assessment was refused by the Manager because of the application was found to be out of time.

6. For the purposes of s 56 of the CPA, the transfer will bring both “heads of the disputed invoices into this Court” resulting in one binding determination not only as to the issues arising under ss 193 and 198 of the Uniform Law but also the issues arising under s 178.

7. When the matter is remitted to the Costs Assessor or Review Panel there will be a common bases for costs assessment “on both halves of the costs.”

8. Accordingly, there is “sufficient reason” to order the transfer of the District Court proceeding into this Court within the meaning of s 140(1) of the CPA, warranting an exercise of the discretion to order a transfer of the District Court proceeding into this Court. There is also an appropriate basis to transfer proceedings under s 89(3A) of the Application Act.

Local Court Proceedings

33. The Local Court proceeding raises issues about the recoverability of legal costs by a solicitor, which in this case is an incorporated legal practice, against its former client in respect of the solicitor’s conduct of lengthy and complex proceedings in the Family Court of Australia on behalf of the client concerning disputed property, child custody and child access issues.

34. Some issues raised on the pleadings and in the evidence in those proceedings were:

1. The possibility of inconsistent findings of fact and law in the concurrent proceedings on foot in the Local Court and the District Court about the validity of the original costs agreement between the plaintiff and the defendant for the purpose of statutory voiding provisions in respect of costs agreements and the disclosure of costs following a finding made by the Review Panel of a contravention of either Division 3 (as the plaintiff contends on the Summons) or Division 4 (as the defendant contends in the alternative on the Summons) of Part 4.3 of the Uniform Law pursuant to respectively s 178(1)(a) or s 185(1) of the Uniform Law.

2. This distinct possibility of inconsistent findings of fact and law flows from the finding made by the Review Panel that the plaintiff’s (first) costs agreement is void for nondisclosure of costs billed in five tax invoices which are the subject of an appeal to the District Court from the Review Panel, in circumstances where two earlier tax invoices issued pursuant to the same costs agreement are the subject of the proceedings in the Local Court where no finding of voidness has been made or alleged on the pleadings; this possibility of inconsistent findings of fact and law warrants a transfer into this Court.

3. The Local Court proceeding raises issues about the proper interpretation of ss 193(2), 198(3)(a) and (4) of the Uniform Law which have either not been authoritatively determined by this Court or which have been considered but by an Associate Judge of this Court in Martinez v Al Maha [2021] NSWSC 932 at [25]-[39], [70], [71], [92]-[98] (“Martinez”) (in favour of the plaintiff) rather than by a Judge; the consequence of this recognition is that those issues which have not been considered by a Judge of this Court may result in an inferior court interpreting provisions which are of fundamental importance to all legal practitioners and their clients about costs agreements, costs disclosure and costs assessment and which may be inconsistent with the decision of the District Court on the same questions.

4. The Local Court proceeding raises an issue as to which is the more appropriate procedure for the recovery of legal costs where tax invoices billing legal costs are found to be out of time for assessment; the proper resolution of this issue would necessarily require an exercise of the inherent jurisdiction of this Court over legal practitioners and legal costs which the Local Court clearly lacks.

5. It is of importance of all practitioners in NSW and Victoria to ascertain whether the 12-month limitation period for assessment in s 198(3)(a) runs from the date of the invoice or bill of costs in question, on the one hand, or from the date of the last invoice or bill of costs rendered at the end of the retainer, on the other. This raises the proper interpretation of s 198(3)(a) of the Uniform Law, upon which there is only one decision in this State. It is a decision of an Associate Judge of this Court which has no apparent status as a precedent: see Martinez at [45]–[69], esp. [65]–[69]. The Manager certainly did not treat it as a precedent in this case because he came to the opposite conclusion on the correct interpretation of s 198(3)(a) to that in Martinez.

6. A further important issue is whether, if the 12-month limitation period in s 198(3)(a) is exceeded (for those invoices the subject of the Local Court proceeding) whether the legal practitioner has standing to apply to extend time under s 198(4) of the Uniform Law. The Manager adopted an interpretation of s 198(4) which permits the client to seek an extension of time but not the legal practitioner. This question about the assessment regime is of fundamental importance to all legal practitioners in this State and Victoria. This novel interpretation question should be determined by a judge of this Court rather than by a Magistrate contrary to what the defendant now contends.

35. Accordingly, there is “sufficient reason” to order the transfer of the Local Court proceeding into this Court within the meaning of s 140(1) of the CPA, warranting an exercise of the discretion to order a transfer of the Local Court proceeding into this Court for determination by this Court on the merits.

36. The following contentions were advanced in the plaintiff’s reply:

1. The defendant appears to assume that the voiding of a costs agreement pursuant to s 178(1)(a) of the Uniform Law, on the ground of nondisclosure of costs committed after the costs agreement was entered into, that is, during the performance of the retainer because estimated costs have been exceeded by actual costs incurred, necessarily results in the costs agreement being rendered void ab initio from the date of the costs agreement. But this does not follow logically in circumstances where the practitioner validly disclosed costs in the first instance and complied with his, her or its statutory obligations until well into the retainer before the estimate was exceeded.

2. One of the central issues in this global litigation is whether the voiding of costs agreement well into the performance of a retainer, because of a belated failure to update a costs estimate, voids the costs agreement ab initio from the making of the costs agreement, on the one hand, or whether it voids the costs agreement only in futuro as from the date when the contravention (of the continuing costs disclosure provisions in Division 3 of Part 4.3 of the Uniform Law) occurs, on the other hand.

3. This issue concerning the proper interpretation of s 178(1)(a) the Uniform Law has not arisen before for judicial determination. One of the grounds for seeking a transfer into this Court, as a superior court of record, should determine its proper interpretation rather than an inferior court. The point affects the outcome of multiple sets of proceedings between these two parties but is also a fundamental provision in respect of the costs disclosure and assessment regime which affects every legal practitioner in the State of New South Wales. This transfer should also occur because the Uniform Law is an enactment of the Victorian Parliament which has been adopted as a statute of the Parliament of New South Wales by the Application Act in this State (as to which, see s 4), it also affects every legal practitioner in the State of Victoria.

4. It is, with respect, wholly inappropriate to have over 60 percent of legal practitioners in Australia relying upon the interpretation of fundamentally important central provisions of a uniform statute regarding the disclosure and assessment of legal costs made by a Magistrate when this Court has the opportunity to interpret them globally.

37. Overall, each of the lower court proceedings raises fundamental questions about the proper interpretation of the Uniform Law, some of which are common to both proceedings and others which are not. Nonetheless the two proceedings are factually connected, indeed, they are interconnected. It is quite repugnant to the costs assessment regime in the Uniform Law to have costs relating to one global retainer of a legal practitioner determined in different courts and under different regimes for quantifying the costs; in the case of the Local Court, in an action at common law on the costs agreement; and in the case of the District Court, in a statutory appeal from a Review Panel involving an assessment of the costs by the purely administrative procedure of costs assessment.

Costs of the Transfer Motion

38. The only reason this dispute about quantification of the legal costs has resulted in two distinct sets of proceedings in the lower courts is because of a fundamental question as to whether the first half of the costs billed by the plaintiff to the defendant are truly statute-barred from being assessed so that they can only be recovered at common law by an action on the costs agreement in the Local Court.

The Defendant’s Submissions

General

39. The defendant advanced a number of general contentions as to the transfer motion as follows:

1. Transferring “a melange” of proceedings to this Court to be determined as part of a review of the Manager’s decision will not lead to the just, quick and cheap determination of any of the proceedings.

2. Each of the District and Local Court proceedings will take a day to be heard, and there are no common issues of law or fact that would result in efficiency gains if they were to be heard all together in this Court. Given that the review of the Manager’s Costs Assessment’s decision will probably take a half-day hearing, the effect of transferring the matters to this Court would be to turn a half day matter into a three-day matter.

3. Other than the fact that the invoices that are the subject of the District Court appeal were for legal services performed in the same matter as the invoices that are the subject of the plaintiff’s summons in this Court, there is no connection between the District Court proceedings and the proceedings in this Court.

4. This Court will not be able, in the judicial review proceedings, to make a determination as to the issues raised with the District Court appeal and as the implications of the cost’s agreement being “void” because the proceeding in the Court are confined to the question of the Manager’s refusal to accept the application for assessment. If a plaintiff is successful, the costs will then be assessed and possibly travel through a review process.

5. It does not follow that success by the plaintiff in judicial review proceedings will result in the same Costs Assessor assessing costs. The previous power of the District Court to remit a matter for redetermination is no longer available under s 89(4) of the Uniform Law. If the District Court appeal was brought up to this Court, the Court itself would need to determine costs, namely, on the present issues (whether the costs should be reduced by $30,000). As mentioned, if the judicial review proceedings were successful the costs assessment would be undertaken by a Costs Assessor.

6. There is no legal issue that the District Court would be incapable of determining.

7. There is no reason why this Court would grant leave under s 89(1)(b) of the Application Act to hear the matter given that it concerns less than $100,000.

8. There is also no reason why the Court would make an order under s 140 of the CPA to transfer these proceedings.

9. Transfer of the Local and District Court proceedings would stymie their efficient determination in accordance with s 56 of the CPA.

40. To the extent that an extension of time is required to bring the transfer motion, counsel for the defendant did not wish to be heard. Notwithstanding the delay in bringing the motion, if extension of time was required to bring the motion, I would grant it, having regard to the issues ventilated in the proceeding identified in the summary of the parties submissions.

District Court Proceedings

41. The defendant made a number of particular submissions regarding the District Court proceedings as follows:

1. Section 198(4) of the Uniform Law is not an issue in the District Court proceedings. The issue is not mentioned in the Amended Summons and no issue of contention or reply has been mentioned in that respect. There has not been any notice of contention or reply to summons filed to raise that provision as an issue.

2. The District Court proceedings are focused on the question of whether the Costs Assessor and Review Panel had properly taken into account the plaintiff’s failure to comply with s 178(1)(b) of the Uniform Law in assessing the costs that were due. Section 198(4) is about extensions of time for costs assessment applications. It could not be relevant to the District Court proceedings, because there is no dispute that the application for assessment which is the subject of the appeal was within time.

3. The grounds of appeal in the Amended Summons consist only of:

1. The Review Panel assessment of costs as fair and reasonable, involved the costs invoices that exceeded costs available under a void costs agreed.

2. The Review Panel cannot award costs greater than the void costs agreement

3. Section 185(1) is confined to the contravention of under Division 4 of Part 4.3 of the Uniform Law rather than a failure to disclose under s 178(1)(a).

4. By the second ground, the defendant contended that the Review Panel failed to properly exercise a discretion under s 200(1)(b) of the Uniform Law by failing to address the plaintiff’s non-compliance with disclosure obligations, namely, a disclose to the defendant of “the anticipated to total costs” pursuant to Div 3 of Pt 4.3 of the Uniform Law and to assess fair and reasonable costs in that light.

5. The grounds raise whether it was reasonably practicable for the plaintiff to disclose legal costs at the outset rather than disclosing “charging rates”.

6. The issue regarding whether the agreement was void ab initio or void in futuro does not squarely arise. It may be that the plaintiff wishes to argue that the effect of a failure to disclose will only operate from the date failure arose, but the issue was not squarely raised on the appeal at this stage.

7. The issue under s 200(2) of the Uniform Law is a different issue. There are certainly no conflicting authorities on these questions.

4. The supposed risk of inconsistent findings of law and fact by the Local and District Courts does not justify the transfers of those proceedings to this Court, having regard to the following:

1. The prospect of inconsistent findings of law about the validity of the plaintiff’s costs agreement in the Local and District Court proceedings is “vanishingly small” in circumstances where the costs Review Panel found that the costs agreement was void due to the plaintiff’s failure to comply with s 174(1)(b) of the Uniform Law. The defendant is not seeking to disturb this finding in the District Court appeal, and there is no notice of contention from the plaintiff.

2. The defendant’s Amended Defence in the Local Court proceedings expressly pleads that the costs agreement is invalid due to the plaintiff’s failure to comply s 174(1)(b) of the Uniform Law. There is no basis for the plaintiff to content that the costs agreement is valid or that s 174(1)(b) as being complied with.

3. The findings of the Review Panel in the pleadings for the parties in the Local Court proceedings are ad idem about the costs agreement being void.

4. In any event, a judicial review proceeding in this Court does not consider the validity of the costs agreement. That position only arises on the transfer.

5. The Local Court proceedings do not involve any consideration of the provisions of ss 193(2), 198(3)(a) and 198(4) of the Uniform Law.

6. There is no prospect of inconsistent findings, between this Court and the District Court as the judicial review proceedings in this Court are of a limited scope, namely, whether the Manager erred in refusing a costs assessment.

7. There is an impediment to the Local Court proceedings continuing because, on the defendant’s case, the costs in issue in those proceedings would need to be first assessed. If they were assessed the plaintiff may register the Certificate of determination or continue with the proceedings. It is likely the Certificate would be put into evidence in the Local Court and the proceedings discontinued. Hence, the Local Court proceedings, as they presently stand, are of no utility.

42. It is true that the appeal which is being commenced in the District Court could have been commenced in this Court under s 89(1)(b) of the Application Act but it is unlikely that this Court would have granted such leave.

43. The appeal to the District Court does not raise questions of statutory interpretation.

44. In any event, the plaintiff’ submission overlooks the extensive body of case law from other courts concerning provisions analogous to s 198 of the Uniform Law, which was set out in Martinez at [35]-[39]. The point of contention in the Supreme Court proceedings is not as novel as the plaintiff suggests.

45. The District Court proceedings would be ready and able to take a hearing date as soon as the transfer notice of motion is determined. It is inevitable that a one-day matter in the District Court would be able to be listed much sooner than a three day matter in the Supreme Court.

46. Accordingly, there is no basis for the District Court proceedings to be transferred to the Supreme Court. Even if there was such a basis, the Court would have regard to s 56 of the CPA and decide not to order their transfer.

Local Court Proceedings

47. In summary, the defendant made the following submissions (subject to the above discussion as to the utility in respect of these proceedings):

1. There is no suggestion that the Local Court lacks jurisdiction to determine the Local Court Proceedings.

2. Similar submissions were made as to the prospects of there being inconsistent findings of law as were made with respect to the District Court proceedings. In particular it was submitted that the only matters the Local Court will have to determine are:

1. Is the costs agreement void due to a failure to comply with s 174(1)(b) of the Uniform Law?

2. If yes, then have the costs been assessed, or has any costs dispute been determined, in accordance with s 178(1)(b) of the Uniform Law?

3. If the answer to (b) above is no, then does s 178(1)(c) of the Uniform Law have the effect that the Local Court proceedings are unable to be brought by the plaintiff?

3. If the costs agreement is void, and no costs assessment application has been made in respect of the costs, and no costs assessment application can now be made because the plaintiff is out of time, then there is no procedure for recovery of the costs available to the plaintiff.

3. Accordingly, there is no sufficient reason for the Local Court proceedings to be transferred to the Supreme Court. Even if, contrary to these submissions, there was sufficient reason, the Court would not exercise its discretion to transfer the proceedings having regard to s 56 of the CPA.

CONSIDERATION

48. It may be observed at the outset of these considerations that the application to transfer the Local Court proceedings per se attracted less significance in the determination of the Transfer Motion during the course of oral submissions. As counsel properly conceded, if the District Court proceedings were transferred to this Court, the Local Court proceedings became largely redundant and, in any event, were maintained as a “fallback case” should the judicial review of the Manager’s decision fail.

49. This is not to suggest that all aspects of the Transfer Motion should not be considered (as they have been) but to place the Transfer Motion in context, particularly as to the significance of the motion to transfer the District Court proceedings to this Court.

50. As to the District Court proceedings, it may be accepted, also at the outset, that, as submitted by the plaintiff, there is a connection between the District Court appeal, in respect of the quantification of the “second half” of the costs billed to the defendant by the plaintiff under his retainer for the Family Court proceedings and the quantification of the costs billed to the defendant in the “first half” of his retainer of the plaintiff in the same Court to conduct the same proceedings.

51. Further, the respective District and Local Court proceedings concern the quantification of the legal costs billed to the defendant with respect to the same retainer, albeit in respect of the performance of legal services at different stages of the Family Court proceedings.

52. However, after carefully considering all the submissions of the parties, I am of the view that the Local and District Court proceedings should not be transferred.

53. As was emphasised in both Wende (No 1) and Wende (No 2), the role of this Court on judicial review from costs assessments is narrow. The judicial review proceedings in this Court are particularly narrow and confined to the question of the Manager’s refusal to accept the application for costs assessment because they were filed out of time. Those proceedings principally concern the proper construction of s 198 of the Uniform Law. This is not an issue that has any relevant connection to the District Court proceedings. The issue does not arise in the grounds of appeal of the District Court proceedings, which were set out in the summary of submissions by counsel for the defendant above.

54. The proceedings in this Court also do not canvass the voiding issue that the plaintiff wished to raise in the Local and District Courts (the grounds in the District Court proceeding now fix upon ss 185 and 200 of the Uniform Law).

55. It is noteworthy that, if the plaintiff prevails on the judicial review application, the resulting costs assessment would be undertaken by a Costs Assessor. It does not follow that it would be the same Costs Assessor assessing costs. If the District Court appeal was brought up to this Court and the appeal was allowed, the Court itself would need to determine costs. The submission by the plaintiff that bringing both proceedings together would necessarily allow an overarching resolution is misconceived.

56. The effect of cl [3] of Sch 1.13 the COJPLA Act inserting sub-s (1)-(3A) into s 89 of the Application Act was to ensure that this Court has a supervisory jurisdiction over costs assessment procedures. This appears to remedy an amendment to ss 384 and 385 of the former Legal Profession Act 2004 (NSW) (repealed), made by the Courts and Crime Legislation Amendment Act 2008 (NSW), that made appeals against Costs Assessors to be heard by the District Court. It is noteworthy that s 89(1)(b) of the Application Act made this Court’s jurisdiction to hear an appeal from a decision of a Review Panel subject to a grant of leave where the dispute is under $100,000. The second reading speech of the then-Attorney General, the Hon Gabrielle Upton, for the COJPLA Act stated that:

This amendment will reinstate the supervisory jurisdiction of the Supreme Court over practitioner’s costs and will ensure that the Supreme Court has the power to hear the more significant or complex costs assessment appeals.

57. I agree with the submission of the defendant that the second reading speech demonstrates that Parliament intended that matters of some seriousness or complexity, or which require the protective function of this Court, or have a public interest component would be brought to this Court under s 89(3A) of the Application Act.

58. As noted above, the voiding issue in the District Court proceeding was amended to focus on the relief under ss 185 and 200 of the Uniform Law. The issue as to the proper construction of s 178(1)(a) of the Uniform Law would appear to only have a prospect of agitation in the District Court Appeal if raised by a contention (or cross appeal) by the plaintiff which is, at this stage, problematic.

59. But even if the proper construction under s 178(1)(a) of the Uniform Law remains a live issue, I see no reason to doubt that the District Court is more than capable of resolving that issue.

60. Counsel for the plaintiff, Mr Bevan, substantially relied upon the fact that there is no judicial authority in this Court as to that question. This submission discounts, wholly inappropriately in my view, the decision of Harrison AsJ in Martinez. Although decisions of an Associate Judge may be set aside or varied by this Court (Supreme Court Act s 118(3)) and may be appealed to this Court (Uniform Civil Procedure Rules 2005 (NSW) r 49.4), an Associate Judge can constitute this Court (Supreme Court Act s 118(5)). Unless a decision of an Associate Judge is set aside or varied or an appeal is allowed, it is and remains a decision of the Supreme Court. It is plainly judicial authority of this Court. In any case, there has been judicial consideration, at least in part, of the voiding issue in Bevan v Bingham [2022] NSWSC 863 on the effect of s 178(1)(a) of the Uniform Law at [97]-[99] and the authorities cited therein.

61. The amount of costs involved in the District Court proceedings is under $100,000 and would ordinarily require leave if the matter was commenced in this Court: Application Act s 89(1)(b). In light of the foregoing analysis, I am not satisfied that the issues raised in these proceedings involves some serious or complex issue, issue of significant principle, or any public interest component that enlivens the protective function of this Court. I am of the view that, had the District Court proceedings in the Amended Summons been commenced in this Court, some real doubt may be held that leave would be granted under s 89(1)(b) of the Application Act.

62. It follows that it is not appropriate for this Court to exercise its discretion under s 89(3A) of the Application Act nor s 140 of the CPA to transfer the District Court proceedings to this Court.

63. Furthermore, I note the submission of the defendant that the District Court proceedings are ready and able to take a hearing date as soon as the transfer notice of motion is determined. I note that, in those circumstances, a half-day or one-day matter in the District Court would likely be listed and determined much sooner than a hearing in this Court which, in my view, in a joined, transferred proceeding would be more than one day in length. Therefore, I consider it to be consistent with the overriding purpose in s 56 of the CPA that the District Court appeal not be transferred.

64. In addition to my earlier observations as to the significance of the transfer application viz-a-viz the Local Court, I note that, as the Local Court proceedings canvass similar issues to the District Court proceeding, the above analysis is also applicable to the transfer application for the Local Court proceedings. This allows me to deal with the issues in that matter quickly.

65. In any event, the submission of Mr Bevan that it is “wholly inappropriate” for a Magistrate to determine the interpretation of a uniform statute that affects “60 percent of legal practitioners in Australia” when this Court could interpret the law must be rejected. There is nothing inappropriate in a Magistrate of the Local Court exercising their statutory powers within their jurisdiction to deal with questions of law. The mere fact that this Court may have an opportunity to deal with the same question of law does not mean the Local Court is ill-equipped, unqualified or not a proper forum to also deal with the matter. It certainly does not represent a necessary precondition for a transfer of the Local Court proceedings to this Court.

66. Although the Local Court is an inferior court in the judicial hierarchy in this State, it by no means follows that judicial officers who constitute that Court are unable to grapple with the legal issues raised.

67. The fact that an interpretation of a statute may affect a large number of people in Australia is not a sufficient reason why Local Court proceedings should be transferred to this Court. I see no reason why the Local Court is not an appropriate forum to decide on the proper construction of a law of this State. Although the Uniform Law is set out in Sch 1 to the Legal Profession Uniform Law Application Act 2014 (Vic), it applies as a law of this State and so applies as if it were an Act of the Parliament of New South Wales: Application Act s 4. There is no reason why the Local Court cannot, within its jurisdiction, interpret or construe the Uniform Law.

68. The mere fact that its interpretation might affect legal practitioners in Victoria is likewise not a sufficient reason, in and of itself, to transfer proceedings in the Local Court to this Court. If that were the case, every issue involving uniform legislation could be transferred to this Court.

69. Accordingly and to the extent raised by the plaintiff, I do not consider it appropriate for this Court to exercise its discretion under s 140 of the CPA to transfer the Local Court proceedings to this Court.

70. The defendant sought an order that the plaintiff pay the defendant’s costs of the Notice of Motion. The defendant noted that they have “incurred significant costs in these proceedings as a result of the plaintiff’s insistence on the parties filing evidence and submissions in the Supreme Court addressing all aspects of the summons”. I do not consider there is sufficient evidence before me to know just what these “significant costs” are. Nevertheless, I propose to make an order that the plaintiff pay the defendant’s costs of the Transfer Motion on the basis that the issues raised in the motion are different to the narrow and confined issues in the Summons, and consistent with the disposition of the motion.

ORDERS

71. For these reasons, I make the following orders:

1. The Notice of Motion filed 11 September 2021 is dismissed.

2. The plaintiff is to pay the defendant’s costs of the Notice of Motion.

Decision last updated: 25 August 2022