A.C.N. 627 087 030 Pty Ltd as trustee for the YBL Trust (ABN 36 417 292 176) trading as Yates Beaggi Lawyers v Andrew John Price; A.C.N. 627 087 030 Pty Ltd as trustee for the YBL Trust
[2024] NSWDC 121
District Court of NSW|2024-02-02|Before: Mr J, Basten JA, Leeming JA
By Notice of Motion filed 22 November 2023, the Applicant seeks the following orders:
1. Pursuant to s 89(4) of the Legal Profession Uniform Law Application Act 2014 (NSW) ('LPULAA'), grant leave to the Plaintiff to rely upon:
1. Paragraphs 7 to 59 of the affidavit of Farshad Amirbeaggi affirmed 28 September 2023.
2. Tabs 3 to 9 of Exhibit FA-1.
3. The expert report of Joseph Michael Rose dated 19 October 2023.
1. The Defendant pays the Plaintiff's costs of the Motion.
The affidavit evidence relied on was not short. The court bundle comprised 2 lever arch folders including documents extracted from in excess of 9,000 pages of material in the costs assessment process and appeal to date.
In relation to the affidavit of Joseph Michael Rose, I refused leave fundamentally on the basis that the document is a written submission and does not offer expert opinion of fact. Mr Rose opined conclusions, which are matters for the ultimate determination of the Court in the appeal and which were well within the expertise (unchallenged) of the costs assessors below. I note that in Gazecki v McCabes Lawyers Pty Ltd (2020) 102 NSWLR 259; [2020] NSWCA 98, Basten JA at [43] (Leeming JA and Simpson AJA agreeing) said of a rehearing such as this: "a lower standard of scrutiny may well be applicable to an assessment of what costs are fair and reasonable in the circumstances of the particular case. Particularly is that so where a specific body of costs assessors, appointed solely for that function, reach evaluative judgments. Furthermore, costs assessors are expected to ensure consistency of approach, being a standard which cannot readily be applied by a reviewing Court with limited experience of such matters." (bold added for emphasis)
Nothing from within the affidavit of Mr Rose was identified to me as a matter in which the Court, or, on referral of the matter out to a referee of requisite expertise, the referee would be lacking or would be otherwise assisted by.
In this regard, Mr Rose was briefed to answer a list of questions of law set out at [11] of his report. His professional education and training, as described by him at [3] of his report, discloses his expertise as having obtained the qualification Costs Lawyer within the jurisdiction of England and Wales in 2014, being a qualification regulated by the Costs Lawyer Standards Board which he described as "a separate legal profession" in those jurisdictions "focused solely on the practice of legal costs". He was admitted to practice in New South Wales as recently as 11 December 2020. He has only ever practised "exclusively in the area of legal costs since April 2010".
In my assessment, that education, training and experience would not place him in a position of advantage over that of a referee or a judge of the Court in the assessment of such matters with which he deals, such as whether or not costs of responses to emails by Mr Amirbeaggi were fair and reasonable. In my opinion, that assessment requires operational legal practice management skills and experience. Evaluation of what is fair and reasonable will often require the assessor to possess a deep experience, even an intimate connection, with how things are professionally and efficiently done by competent and ethical lawyers within the subject jurisdiction. Mr Rose's CV does not disclose any "hands on" experience in the conduct of legal practice in NSW.
In Ahern v Aon Risk Services Australia Ltd [2022] NSWSC 702 at [67], and after referring to the function of assessing fairness and reasonableness of charges for legal work as "a matter for evaluation on the infinitely variable combinations of circumstances that occur from case to case", Fagan J said: "The purpose of adducing evidence from costs consultants could only be to introduce their expert opinions as to the appropriate hourly rate for [the solicitor] in this case. The Court would be unlikely to receive expert evidence for that purpose. For the Plaintiffs to ask the Court to grant leave and to uphold an appeal ground upon the basis of such opinions would be to propose that the judgment of the Plaintiffs' own privately engaged experts should prevail over that of the statutorily appointed experts." I respectfully agree.
The assessment of fair and reasonable costs requiring consideration of whether or not it was reasonable to carry out the work, whether or not the work was carried out in a reasonable manner and for a reasonable fee, will often require regard be had to such things as the skill, labour and responsibility displayed by the legal practitioner, the complexity, novelty or difficulty of the matter, the quality of the work done, and whether the level of expertise was appropriate to the nature of the work done.
Mr Rose's report contains long expressions of his view of case law and statutory interpretation required of the approach of a costs assessor. In my opinion, that would be, in a forum bound by rules of evidence, which costs assessments are not, wholly inadmissible under the expert evidence exception (Evidence Act 1995 (NSW) s 79). Absent application of rules of evidence, it remains a matter for submissions. Mr Fernon SC, for the Applicant, submitted that Mr Rose is a specialist in Costs Assessments, and in his role has seen great numbers of bills of costs and had vast experience with the processes and reasoning within costs assessments. In my opinion, his view in the assessment of, for example, whether or not responses to emails were fair and reasonably performed at a fair and reasonable cost, is advanced in the absence of ever having been in the professional role of a solicitor managing and conducting litigation, including providing advices, taking instructions and exercising the discretion as to how best to proceed according to the practitioner's obligations to the Court, his opponent and the client. I repeat, Mr Rose is not of training and experience as to place him to be in a position of providing assistance on those matters such that his evidence satisfies the low threshold for any of the categories of fresh, additional or in substitution evidence referred to in s 89(4).
Proceeding with the observation expressed by Fagan J, just quoted, Mr Rose's report at [88] to [90] does not offer acceptable opinion, is not fresh, additional or evidence in substitution within the meaning of s 89(4). I refer to this passage because Counsel for the Plaintiff focused on it. In this case, just as Fagan J observed to be the situation in Ahern v Aon Risk Services at [67], the proposed evidence of Mr Rose addresses the range within which solicitors commonly charge fees as published by the CARC. Just as Fagan J observed, particularly by that publication, that hourly rate range is commonly known. At those paragraphs of his report, Mr Rose points to the CARC Guideline hourly rate range as $450-$750 because Mr Amirbeaggi is a senior partner/specialist of more than 10 years' experience. He further observes that after the period in which the subject work was performed, the CARC guideline was increased in 2023 to a range of $540-$900 per hour. He then, without further basis of rationale, provided his conclusion: "…I am of the view that the rate of $700 per hour is entirely reasonable for the work conducted." That statement is merely a submission. Indeed, the CARC Guideline was referred to in the assessment appealed from. There is no content of specialist knowledge which would assist in or advance the determination of an appeal from the assessment below to be found in those paragraphs.
Lastly, Counsel for the Plaintiff submitted that Mr Rose's line-by-line assessment of the bill of costs, Annexure B to his report, that is, his assessment of the fair and reasonable charge for each item of claim, would be of assistance. I reject that proposition for the same reasons. Mr Fernon SC also referred to mathematical errors made in the assessment below. Each of these last two mentioned matters, in my view, are matters for submission and Mr Rose's opinion does not satisfy even the low threshold, of which I have spoken, required for the grant of leave under s 89(4).
[3]
My Rulings on the Mr Amirbeaggi Affidavit
As discussed with the parties, I set out short reasons in a schedule format:
Paragraph Number Leave Granted/Not Granted (s 89(4)) Reason(s)
[7] Not granted Not pressed.
[8] Leave granted in part Tab 3 phone records allowed. Tab 8 allowed as additional evidence containing the full names of the participants in the phone calls.
[9] Not granted Pressed by the Plaintiff as giving context and flow to the affidavit. Leave not granted because the evidence is not fresh, additional or in substitution for evidence.
[10] Not granted Same as for [9].
[11] Not granted Same as for [9].
[12]-[23] Leave granted (conditional) Allowed as substituted evidence on condition that the evidence below to be substituted for is identified. The parties will attempt to agree on identification of evidence to be substituted and, failing agreement, are to return the matter before me.
Tabs 3, 4, 5 and 6 exhibited to the affidavit Leave granted Objections go principally to weight.
[24] Leave granted Evidence is additional.
[25] Leave granted Evidence is additional and new. Defendant pressed that the evidence is in inadmissible form. I agree, but the grant of leave is given before the whole of the evidence to be in the contest can be known and the evidence is not so inadmissible as for it not to be left to the Court in the appeal to determine that issue.
[26] Leave granted Evidence is additional and new.
[27] Leave granted Same as for [26].
[28] Leave granted in part Pure submission, save for the last sentence which is new evidence and leave is granted in relation to that sentence.
[29] Leave granted Evidence is new and additional. The Defendant opposition is mainly to admissibility of form which is a matter for the Court on the hearing of the appeal.
[30] Leave granted Same as for [29].
[31] Leave granted Evidence is new. The objection goes mainly to weight.
[32] Leave granted Evidence is new.
[33] Not granted Agree with the Defendant that the evidence is hearsay and in summary form. In the balance, consideration of whether objection to the admissibility should be left to the Court in its ultimate determination on the hearing of the appeal; in my view, the evidence is so lacking in form as to not satisfy the categories of fresh, additional or in substitution, and otherwise to admit it would be prejudicial.
[34] Not granted Evidence is not fresh, additional or in substitution.
[35] Leave granted Leave to amend the first line of the paragraph by deletion of the words "that letter" and substitute "letter from Mary's solicitors, a copy of which is located at pages 3676-3678 of Exhibit FA-1". The evidence is additional and provides context.
[36] Leave granted Evidence is additional.
[37] Not granted Evidence is not fresh, additional or in substitution because the email correspondence is already in evidence.
[38] Leave granted Evidence is new.
[39] Not granted The text message is already in evidence. This evidence is not new, additional or in substitution.
[40] Not granted Evidence is not fresh, additional or in substitution.
[41] Leave granted The last sentence is new and the preceding sentence reference to an email already in evidence gives it context.
[42] Leave granted Merely a reference to timing of events for context.
[43] Not granted Evidence is not fresh, additional or in substitution.
[44] Leave granted The inclusion of transcript properly completes the record.
[45] Not granted Evidence is not fresh, additional or in substitution.
[46] Not granted Same as for [45].
[47] Not granted Same as for [45].
[48] Not granted Same as for [45].
[49] Not granted Same as for [45].
[50] Not granted Same as for [45].
[51] Leave granted Evidence is new.
[52] Leave granted Same as for [51].
[53] Leave granted Evidence is additional.
[54] Leave granted Same as for [53].
[55] Leave granted Evidence is new.
[56] Leave granted Same as for [55].
[57] Leave granted Evidence completes the record.
[58] Not granted Not pressed.
[59] Not granted Plaintiff is "agnostic" as to its admission. Not fresh, additional or in substitution. The evidence is superfluous.
[4]
Some Practice Observations
Historically, since 1993, the New South Wales Legislature has provided a system of assessment of costs by legal practitioners whose expertise for the task is that they are well versed in the management and conduct of legal practice in this jurisdiction. The statutory process was designed to replace assessment of costs by court officers, less versed in conduct of a legal practice: Attorney-General of New South Wales v Kennedy Miller Television Pty Ltd (1998) 43 NSWLR 729 at 731 as referred to in Frumar v The Owners of Strata Plan 36957 (2006) 67 NSWLR 321; [2006] NSWCA 278 per Giles JA at [32]. Considerations of efficiency, and economy of method of assessment and in the giving of reasons are properly employed by assessors and review panels: Frumar's case per Giles JA at [45] (Beasley JA (as her Excellency then was) and Ipp JA agreeing); Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd [2011] NSWDC 55 at [28]-[32]; Ahern v Aon Risk Services Australia Ltd [2021] NSWCA 166.
An objective of the Legal Profession Uniform Law (NSW) ('LPUL'), which commenced in July 2015, is the promotion of regulation of the legal profession that is 'efficient, effective, targeted and proportionate': s 3(e). An objective of Part 4.3, Division 1 LPUL is that law practices must not charge more than fair and reasonable amounts for legal costs, and to provide a framework for assessment of legal costs: ss 169(b) and (c). S 173 LPUL expressly prohibits a law practice from acting in a way that unnecessarily results in increased legal costs payable by a client, and directs particular attention to the need for a law practice to act reasonably to avoid unnecessary delay resulting in increased costs. In this way, s 173 describes the role of costs assessors and the nature of a cost assessment as exercising expert practice management based evaluative opinion. S 199 LPUL ensures that costs assessors conduct costs assessments. S 6 LPUL defines costs assessors as persons appointed by a court or other official to have responsibility of conducting costs assessments, or a person or body designated by legislation to have that responsibility. S 201 LPUL requires an assessor or a review panel to give reasons.
The above referred to authorities well establish that the expert evaluative opinion process of a costs assessment does not require of an assessor or a review panel extensive and technical reasons as might be expected of a court but adopts, at the least, a minimum standard which places the parties in a position to understand why the decision was made, sufficiently, to allow them to exercise any right of appeal.
When considering applications for assessment, an assessor or a review panel is not bound by the rules of evidence and may inform himself or herself or itself in any matter in the manner he, she or it thinks fit: s 69 LPULAA. On the filing of a certificate of determination by an assessor or a review panel in the office or registry of a court having jurisdiction to order the payment of that amount of money, and with no further action, the certificate is taken to be a judgment of that court for the amount of unpaid money: s 70(4) LPULAA. Except by Part 7 LPULAA, a costs determination is binding on all parties and no appeal or other assessment lies in respect of the determination: s 73. Pursuant to s 76 LPULAA, the assessor or review panel must determine what is a fair and reasonable amount of costs for the work concerned and may have regard to the factors set out in ss 172(1) and (2) LPUL. S 80 LPULAA, with reference to s 201 LPUL, requires an assessor or review panel to give reasons.
The above referred to authorities and statutory provisions well establish the intention to achieve an efficiently conducted expert opinion evaluative process by costs assessors. This, in my opinion, is put beyond doubt by the stated statutory objective quoted above from s 3(e) LPUL.
Those objectives of efficiency and a targeted approach, conscious of proportionate incurring of costs, are, in my opinion, immediately relevant to the present application for leave pursuant to s 89(4) LPULAA and will be influential in all such applications: see also s 60 Civil Procedure Act 2005 (NSW); see for illustration Fong bhnf Fong v Weller [2024] NSWCA 46, particularly at [57]-[58] per Kirk JA (Gleeson and Mitchelmore JJA agreeing).
In an application for leave, efficiency and proportionality are important considerations. To that end, that there is a low threshold for admissibility of evidence under s 89(4) cannot relieve the moving party from clearly identifying amongst the evidence for which leave to adduce is sought, that which is fresh, in addition, or in substitution for evidence and, in regard to the latter category, the evidence which it is intended be substituted. Pursuant to the statutory objective under s 3(e) LPUL, an efficient and appropriately targeted approach, in order to contain costs of leave applications such as the present, will usually require the moving party proceed by way of a schedule in which the subject proposed evidence is clearly identified as fresh, additional or in substitution and, if in substitution, then the evidence being substituted and which will no longer be relied on.
In the present case, the moving party did not proceed in that manner, and I indicated that I would have seriously contemplated dismissing the application but for the fact that the Respondent had provided a style of schedule. It was only by that schedule that the matter proceeded with the required efficiency.
In my opinion, it will usually be appropriate preceding an application for leave to rely on evidence in the appeal pursuant to s 89(4) LPULAA for the moving party to have served on the respondent party a schedule particularising the evidence said to fall into each of those categories of fresh, additional or in substitution, as well as identifying the evidence to be substituted for and no longer relied upon. The schedule should be in a format by which the respondent to the application may enter its response to each piece of evidence in relation to which the leave is sought. In my opinion, the Court is entitled, and the parties are entitled, to efficiency through an approach targeted by such a schedule and so to contain costs of an interlocutory application such as this.
Costs of the application should follow the event. On that basis, and having heard the parties' arguments in relation to costs, it is appropriate that the Applicant pay 60% of the Respondent's costs of the Motion.
[5]
Orders
I make the following orders:
1. Leave to the Applicant to rely on evidence in accordance with the schedule format reasons in this judgment.
2. Refuse leave to the Applicant to rely on the report of Michael Rose dated 19 October 2023.
3. Applicant to pay 60% of the Respondent's costs of the Motion.
4. Return the matter for mention before the List Judge on 30 April 2024, at which return the parties are to inform the Court of agreement or otherwise of evidence to be substituted for in relation to paragraphs [12]-[23] of the affidavit of Farshad Amirbeaggi affirmed 28 September 2023.
Note: The Parties indicated their willingness to, but have failed to, satisfy the condition of leave in relation to paragraphs [12]-[23] of the affidavit of Farshad Amirbeaggi affirmed 28 September 2023.
[6]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 18 April 2024
Parties
Applicant/Plaintiff:
A.C.N. 627 087 030 Pty Ltd as trustee for the YBL Trust (ABN 36 417 292 176) trading as Yates Beaggi Lawyers
Respondent/Defendant:
Andrew John Price; A.C.N. 627 087 030 Pty Ltd as trustee for the YBL Trust