A.C.N. 627 087 030 Pty Ltd t/as Yates Beaggi Lawyers v Poche

Court of Appeal (NSW)|2024-05-07|Before: Kirk JA, Stern JA, Henry J

Background and YB2's contentions

Given the way in which YB2 approached this application, it is convenient to outline YB2's submissions at the same time as detailing the background to the matter and the reasons of the Costs Assessor, Review Panel and the primary judge.
Adam and his brother, Wayne Poche, were parties to what was essentially family provision litigation in the Supreme Court of New South Wales. Adam and Wayne's mother had died in 2016 (the "deceased"), leaving an estate valued at approximately $2.3 million. The deceased left Adam 15% of her estate ($129,379.50 at the time of probate) and left the bulk of her estate to Wayne. Wayne is the sole executor under the deceased's will.
In these circumstances, Adam instructed Yates Beaggi Lawyers ("YB1") in 2016. YB1 sent a costs disclosure letter to Adam on 22 August 2016. On 28 October 2016, Adam filed a summons seeking an increase in his share of the deceased's estate to $600,000 "plus some costs". In addition to this family provision claim, both Adam and Wayne brought other claims in that litigation. Adam initially challenged the validity of the deceased's will on the basis of testamentary capacity. He also advanced a claim for payment by the estate of amounts equal to the financial contributions he asserts he made for the deceased's benefit during her lifetime. Wayne cross-claimed and sought an order that Adam pay him the sum of $1,500 per week from 1 August 2009 until Wayne's death.

The Costs Assessment

On 12 August 2020, Adam applied to the Costs Assessor for an assessment of costs, which the Costs Assessor found must be limited to the costs charged by YB2, as the respondent to the application for assessment. Those costs related to the period between 17 September 2018, the date when YB2 notified Adam that it would take over his legal work from YB1, and 13 August 2019, the date of the last relevant invoice. YB2 had invoiced Adam $366,975.03 by way of legal costs and disbursements over this period.
The Costs Assessor assessed the fair and reasonable costs for the work of YB2 under s 199 of the Uniform Law as $268,433.88. On 3 May 2021, the Costs Assessor issued a Certificate of Determination to this effect, pursuant to s 70 of the Application Act, and issued a Statement of Reasons, pursuant to s 201 of the Uniform Law. As Adam had paid the whole amount claimed in YB2's invoices, the Costs Assessor found that YB2 should refund the sum of $98,541.15 to Adam.
In his Statement of Reasons, the Costs Assessor observed that there was no costs agreement or disclosure provided by YB2 in respect of the work undertaken on behalf of Adam.
Under the heading "Part 5 The assessment, (i) The work undertaken", the Costs Assessor included the following: "46. The Costs Applicant has provided detailed objections to the costs claimed. 47. In turn, the Costs Respondent has provided detailed responses. The Costs Respondent has also provided significant volume of (but not all) records of the work undertaken in Dropbox folders. 48. I have reviewed each invoice, the objections, the responses and the Dropbox folders in undertaking this assessment. … 52. There were a number of issues at play, including complex corporate structures, prior provision to the parties and their respective needs. 53. Insofar as the Costs Applicant was concerned, it was necessary to address his personal circumstances, which were somewhat complex, with emergent health issues." (Emphasis in original).
Under the heading "Part 8 Assessment", the Costs Assessor stated: "68. The work undertaken involved preparation of the matter for hearing. It involved preparation and updating the Costs Applicant's affidavit sworn on 5 September 2018, review and taking instructions on the other party's affidavit of 22 November 2018, attendance on a number of directions hearings, briefing senior counsel, providing documents under a notice to produce, obtaining medical evidence regarding the Costs Applicant's health issues, updating the Costs Applicant's affidavit of personal circumstances, preparing an affidavit as to the legal costs, preparation for and attendance on the hearing (including preparation of the Court books and chronology). 69. I have reviewed the bills having regard to the documents provided in the Dropbox folders. In doing so, I have noted: i. There are a significant number of very short emails sent or received by the Costs Respondent, which have been charged on a six-minute basis; ii. There are a significant claims for preparing the Costs Applicant's affidavit of 5 September 2018 and subsequent updating affidavit; iii. There were significant claims for reviewing the affidavit of the other party sworn 22 November 2018, comprising five pages with ten pages annexed; iv. Significant claims by Mr Amirbeaggi for reviewing the work undertaken by Ms Rabadi. In turn there is a significant claim by Ms Rabadi for reviewing the work of Ms Muliadi; v. Claims for the attendance of both Mr Amirbeaggi and Ms Rabadi on the hearing, including review of the transcript by Mr Amirbeaggi; vi. A claim for the preparation of a personal document."
The Costs Assessor then made a number of comments in relation to items ii. to vi. above and concluded: "75. It will be apparent from the foregoing that, leaving aside the hourly rates charged in the invoices, there are significant claims that are, on their face, excessive."
Under the heading "Part 9 Proportionality", the Costs Assessor stated: "76. On 5 July 2019 Ms Rabadi swore an affidavit deposing the costs incurred to date and an estimate of the future costs of the proceedings. Those costs totalled $760,819.80 on an indemnity basis. 77. By contrast, the defendant estimated his costs at $298,405.60. [the Costs Assessor then included an extract from the judgment of Henry J culminating in her Honour's decision to cap Adam's costs at $125,000.00] 79. It is not open to me to adopt the course taken by the Court, however it is the inevitable conclusion that the total costs rendered by YB in its various forms, are disproportionate to the subject matter of the proceedings."
YB2 contend that this passage of the Costs Assessor's reasoning discloses the error relied upon in Contention Two. YB2 contends that the error lies in making a finding that the costs rendered by Yates Beaggi Lawyers, in its various iterations, were disproportionate in reliance upon the conclusion of Henry J in the Supreme Court proceedings, which was a conclusion on the separate and distinct issue of party-party costs in a jurisdiction which permits costs capping. Whilst YB2 accepts that proportionality to the subject matter in issue is a relevant matter for a costs assessor to take into account, Senior Counsel for YB2 submitted: "We say that the way in which the costs assessor applied proportionality in this case was wrong because there was no independent consideration of proportionality as we say is required, but what occurred here was it appeared that, because of the observations made by her Honour Henry J, the costs assessor considered that it was inevitable that that reasoning applied to a solicitor client assessment as opposed to what as [sic] in her Honour's contemplate [sic] there, which was a party/party assessment in a cost‑capping jurisdiction and, indeed, we say that that was a part of the reasons that even the costs review panel appeared to walk away from or distance themselves from in terms of its correctness."
YB2 submits that the Costs Assessor erred in taking the observations of Henry J as to proportionality into account and also in giving proportionality a "preeminent role" that was not justified in the circumstances. Further, YB2 submits that the Costs Assessor was required to, but did not, assess proportionality by first articulating "the metes and bounds of the retainer, not simply by reference to documents but also conversations and discussions between solicitor and client." YB2 submits that the question of proportionality must be framed by reference to the work that was required to be undertaken in accordance with the instructions given by the client. Where, as here, there was no written retainer, YB2 says that that requires consideration of the complexity of the proceedings, the work that was required to be done and the instructions given by Adam.
Under the heading "Part 10 Conclusions", the Costs Assessor stated: "80. I have reached the view that, pursuant to s 172(1), that the costs were not proportionately and reasonably incurred. Further, the costs that are the subject of this assessment, when considered for the work involved or, alternatively, as forming part of the overall costs, are not proportionate and reasonable in their amount. 81. It is not a simple task [sic] dissect the time taken to undertake the work, to deduct the claims that I regard as excessive or duplicated and then to apply an hourly rate to them, however I have attempted to do so. i. I have allowed 12 hours to review and consider the defendant's affidavit of 5 September 2018; ii. I have allowed 22 hours for drafting the Costs Applicant's affidavit; iii. I have allowed 8 hours for drafting the updating affidavit; iv. I have allowed 10 hours for reviewing documents produced by the defendant; v. I have allowed 14 hours for preparation of the Court Book and other documents relating to the hearing; vi. I have allowed 3 hours for drafting the Costs Applicant's affidavit relevant to the "Shiklin" proceedings; vii. I have allowed 45 hours for attendances preparing for, attendance at the hearing and in relation to matters arising during the hearing; viii. I have allowed 250 hours for the various attendances on the Costs Applicant and in progressing the proceedings. 82. Accordingly, I have allowed professional fees of $163,800.00. [T]o this must be added GST, making a total amount allowed of $180,180.00. 83. I have not made any deductions from the disbursements claimed. Accordingly, I have allowed a total of $88,253.88 (including GST as appropriate)."
In support of Contention Two, YB2 submits that in these paragraphs, the Costs Assessor applied a "global" approach to the assessment of costs, as opposed to undertaking an assessment of the work that had actually been done and then determining what was reasonable and what was unreasonable. YB2 submits that the approach of the Costs Assessor falls short of what is required under s 200 of the Uniform Law (which incorporates by reference s 172) because, YB2 says, the Costs Assessor did not consider the actual legal costs: "… in a way that enables a legal practitioner to understand, in terms of methodology that's been applied, which charges are proportionate and reasonable and which are not and which are not in terms of having been incurred in the first place or whether they're reasonable and proportionate but they've been overcharged."
YB2 submits the approach taken by the Costs Assessor in this regard was "no different to the approach that was taken in Frumar", and that the approach of the Costs Assessor "departs from the principles set forth in this Court in Frumar". This, YB2 contends, is both an error of law and a jurisdictional error, being a misunderstanding of the statutory task. In this regard, YB2 submits that: "… the methodological obligations in [s 172] are heightened over and above what was the situation when the legislation was before the Court in Frumar."
In this regard, YB2 submits that the judgment of this Court in Frumar should be understood as governing methodology in addition to the adequacy of reasons, in effect requiring that in order to fulfil their statutory task, a costs assessor must go through the assessment to work out what is reasonable and what is unreasonable in a manner which enables a reader to identify what work has been characterised as unreasonable, overcharging or disproportionate.

The Review Panel

On 3 June 2021, YB2 applied under s 83 of the Application Act for review of the Costs Assessor's determination. Shortly thereafter Adam also applied for review. YB2's grounds for review were extensive, and included: 1. The Costs Assessor had made (at [81]) arbitrary allowances for a range of categories of work; 2. The Costs Assessor erred (at [81]) in applying a global approach in assessing the tax invoices issued by YB2; and 3. The Costs Assessor erred (at [80]) in "finding that the costs are disproportionate to "the subject matter of the proceedings"", because he had failed to take into account aspects of the matter and referred (at [87]) to the judgment of Henry J "in circumstances where her Honour was not aware of the scope of the instructions and work done at the request of the Client" which showed a "reliance" on the part of the Costs Assessor "on irrelevant considerations."
Both YB2 and Adam provided detailed written submissions to the Review Panel and the Review Panel also, by correspondence, sought material, comments or information from the parties. In its submissions, YB2 contended that the Costs Assessor had not had regard to "substantial work" undertaken by YB2. The Review Panel also had the Costs Assessor's files, all the submissions and material submitted by YB2 and Adam, and a USB drive which the Review Panel received on 19 October 2021 containing the 2,756 page court book which was before Henry J and file documents comprising some 6,000 pages.
Following its assessment, on 1 April 2022 the Review Panel issued a Certificate of Determination in respect of each application and a Statement of Reasons.
The Review Panel directed itself on review (at [5.1]), by reference to principles set out in Schedule A to its Statement of Reasons. This included: "A.12 In making its determination, a panel is obliged to deal with the original application "and ultimately make its own determination of that application as if the panel were a costs assessor", subject of course to being confined to the particular grounds raised [Wende v Horwath (NSW) Pty Ltd [2014] NSWCA 170 at [158]]. That suggests the panel should reassess costs rather than indicating whether the assessor had proceeded correctly in the assessment or erred in conduct of the assessment."
The Review Panel confirmed (at [6.13]) that it took into account all the material that was before the Costs Assessor and all the material put before the panel, up to 8 March 2022.
The Review Panel found that no new Uniform Law costs disclosures were made when YB1 ceased work and YB2 commenced work for Adam, and that this was an "important failure to disclose." In addition, the Review Panel found that in a number of respects, the work of YB2 was either not of good quality or was of poor quality. As to the former, the Review Panel highlighted (at [11.11]) YB2's failure to advise Adam as to costs capping. As to the latter, the Review Panel referred (at [11.16]) to YB2's "extraordinarily optimistic" advice as to prospects and (at [11.17]) to YB2's compilation of affidavit evidence, much of which was objected to successfully and not pressed. These examples are not exhaustive of the findings of the Review Panel as to YB2's work being of poor quality or inadequate. Indeed, the Review Panel found (at [11.19]) that "significant parts" of YB2's work was poor quality. In making these findings, the Review Panel specifically addressed the material before it going to instructions given by Adam, and observed that good quality legal work involves giving advice to a client as to appropriate offers to be made at appropriate times, in light of the evidence and material: at [11.18].
The Review Panel then addressed (at [13.14]) YB2's grounds of review "in the light of the panel's observations" regarding the failures as to disclosure, the quality of work performed and appropriate rates.
The Review Panel's key findings included the following: "15.7 The assessor did not adopt some sort of overall impression and pluck a figure out of the air in relation to costs. As the assessor wrote at paragraph 81 "it is not a simple task (to) dissect the time taken to undertake the work, to deduct the claims that I regard as excessive or duplicated and then to apply an hourly rate to them, however I have attempted to do so". 15.8 That was a reasonable approach in the circumstances. It was not an overall global approach, but rather a method of looking at what was done and allowing a reasonable amount of time and thus costs for doing that work. The panel finds no error in that approach. Grounds 2 and 5 are not made out. … 15.11 The panel accepts that the issue of proportionality in relation to costs between a law practice and a client cannot be judged in the same way as proportionality of ordered costs. The panel accepts that it was not inevitable, given [Henry J's] observations, that significant reductions would have to be made to the costs of YB2 billed to Adam Poche. … 15.13 The panel looked at all seven of the bills, the time indicated to have been taken in doing the work, and the costs. The panel can indicate at a level of near certainty that from its examination of those bills, the panel would not have allowed on an item-by-item basis an amount more than the amount ultimately awarded by the assessor. 15.14 The panel accepts having looked at all the relevant matters that the total costs were "disproportionate" given the instructions given by Mr Poche, the amount in issue, the nature of the proceedings and so on. … 15.7 Grounds 10 and 11 are not made out. In any event, the panel exercising its own examination of the bills to determine what costs were proportionate and reasonably incurred would arrive at a figure no more than the amount allowed by the assessor. The assessor did consider whether it was reasonable to carry out the work. The assessor did consider whether the costs were proportionately incurred. 15.8 Whether or not the assessor considered the matters other than the subject matter of the proceedings in determining proportionality, the panel has considered the instructions given by Adam Poche and the various other matters set out above and affirms the assessor's determination that the initial costs claimed were disproportionate. As indicated, the panel would not on a reassessment allow costs that were any greater than the costs allowed by the assessor. Ground 9 is not made out. … 15.10 In any event, the panel has looked carefully through the bill of items and the work done. The panel has had the advantage of being able to examine the USB. … 15.16 The assessor found the charges were not fair and reasonable. The panel affirm that finding." (Emphasis in original)
As is apparent, the numbering of the Review Panel's Statement of Reasons went awry. Where appropriate, and when referencing the Review Panel's Statement of Reasons, I will refer to duplicated paragraphs as either the "first" or "second" iteration of that paragraph.
Consistent with the authority of this Court in Ahern at [92] (Meagher JA, White and Brereton JJA agreeing on this issue), YB2 accepts that the Costs Assessor and Review Panel were not required to carry out a line by line assessment. Nor does YB2 contend that there was only one way to undertake the assessment process. Rather, YB2 contends that the Review Panel erred in finding that the approach of the Costs Assessor was reasonable "in the circumstances" when this "did not look like anything other than a relatively bog-standard costs assessment involving seven invoices". YB2 submits that it was erroneous for the Review Panel to find that the Costs Assessor had not adopted a global approach when "in substance" it was. Thus, YB2 says the Review Panel "endorsed" the errors of the Costs Assessor.
Whilst YB2 accepts that the Review Panel clearly gave independent consideration to the question of what costs were payable under s 199 of the Uniform Law, as is clear for example from the Review Panel's Statement of Reasons (at [15.13]) that the panel "looked at all seven of the bills", YB2 contends that this paragraph is "unilluminating", "begs a number of questions", and does not take the matter any further. As to the Review Panel's statement (at [15.13]) that it would not have allowed, on an item by item basis, an amount more than that awarded by the Costs Assessor, YB2 submits that this conclusion is "as bad as the vice identified in Frumar". YB2 contends that the Review Panel erred in not identifying the methodology it adopted in reaching its conclusions and there is no way of discerning that methodology from the Statement of Reasons: "None of that is a substitution for the way they in fact have endorsed the method and approach that's been taken. Because even though they've said that they've looked at those documents, what they haven't done is they haven't identified, and they can't because there is no way of knowing what's occurred, is what for example fits within any of those categories. What items have been taken up within those categories of the items that were contained in the bills?"
YB2 also contends that the matters identified by the Review Panel (at [15.12]) do not address the reasonableness of the work that was actually performed.
As to the Review Panel's reasons on the issue of proportionality (set out above at [49]), whilst YB2 accepts that proportionality is a relevant matter to take into account, YB2 contends that the Review Panel erred in its conclusions on proportionality in not giving proper consideration to the retainer that YB2 had with Adam. Where, as here, there was no written retainer, YB2 contends that the scope of that retainer depends upon the complexity of the proceedings, the work that was required to be done and the detail of instructions given by Adam orally. They say that the Review Panel's Statement of Reasons does not identify what the retainer was, in order to "frame the question of proportionality."
YB2 acknowledges that it had provided documents in response to a request by the Review Panel on 13 August 2021, as set out in Gibson DCJ's judgment (at J[34]), for: "Any written material indicating the breadth of Adam's instructions, the importance of the subject matter to him, advice as to the amount he would likely secure with a successful family provision claim and any advice as to the amount of costs and the proportion those costs might bear to the amount Adam was likely to recover."
However, YB2 contends that written material "was not the metes and bounds or the outer limits of the instructions." It is in this regard that YB2 contends that the Amirbeaggi Affidavit (discussed below) has significance because it further addressed the ambit of the retainer between Adam and YB2.
YB2 also contends that the approach taken by the Review Panel on the issue of proportionality is of concern as it suggests that less time should be spent on litigation where less money is at stake. Whilst Senior Counsel for YB2 accepted that the legal costs involved should be flagged to clients in lower value matters, he submitted that that could raise "some difficult issues in relation to the way in which solicitors conduct litigation that involves smaller rather than larger amounts."

The primary judge

YB2 appealed to the District Court under s 89(1)(a) of the Application Act. YB2 sought the leave of the Court, under s 89(4) of the Application Act, to rely upon fresh or additional evidence on appeal, including the Amirbeaggi Affidavit. So far as is relevant on this application, YB2 relied upon the following grounds of appeal: 1. The Review Panel erred in adopting the determination of the Costs Assessor, which was erroneous. 2. The Review Panel erred by reason of its failure to apply the provisions of s 172(1)-(2) of the Uniform Law and as a result failed to determine the fair and reasonable costs the subject of the invoices issued by YB2.
By orders on 13 December 2023, the primary judge dismissed YB2's appeal.

The primary judge's rejection of the Amirbeaggi Affidavit

YB2 sought, before the primary judge, leave to rely upon the Amirbeaggi Affidavit. Having regard to the limited ambit of the contentions before this Court, it is unnecessary to delve into the detail of the Amirbeaggi Affidavit. It is sufficient to have regard to her Honour's reasons for refusing leave to rely upon the Amirbeaggi Affidavit.
Her Honour had regard to s 89(4) of the Application Act. Her Honour considered the content of the affidavit, noting (at J[73]) that it was said to be relevant as it put the work done by YB2 "in context, such as demonstrating the experience and excellence of the work done." Her Honour found (at J[76]) that no errors were identified in the Amirbeaggi Affidavit. Her Honour then found (at J[77]) that if the purpose of the Amirbeaggi Affidavit was to establish denial of procedural fairness, there were "significant omissions". The primary judge also took into account (at J[78]-[79]) that YB2 should have been on notice of the need to address issues concerning proportionality before the Review Panel.
This reasoning supported the primary judge's conclusion (at J[80]) that the Amirbeaggi Affidavit should be "struck out". In this regard, the primary judge also found that it was "hard to see what portions, if any, of the affidavit could stand" given that her Honour had refused leave to rely upon all but two of the documents annexed to it and had found (at J[81]) that the two documents which were admitted would have had, at best, "tangential" impact in relation to the procedural fairness ground. Her Honour then observed (at J[82]) that: "Accordingly, the claim of want of procedural fairness must proceed on the basis that, apart from these two documents, which were admitted into evidence without objection, there is no "fresh evidence" for any of the grounds of appeal."
Before this Court, YB2's submission that the primary judge erred in refusing leave to rely upon the Amirbeaggi Affidavit was limited to a contention that the primary judge's reasons (at J[82]) disclosed that her Honour erred by approaching the discretion whether to grant leave as if it turned solely upon whether or not that evidence was "fresh evidence", when the statutory power in s 89(4) of the Application Act is not so limited.
Senior Counsel for YB2 accepted that, unless her Honour's reasons (at J[82]) were so construed, ground 1A of the amended summons would not be made out.

The primary judge's rejection of error on the part of the Costs Assessor and the Review Panel

Before the primary judge, as before this Court, YB2 contended that the Costs Assessor had erred in approaching his task in a manner inconsistent with Frumar (at J[101]) and that the Review Panel had adopted the Costs Assessor's erroneous approach (at J[101]-[102]) and in any event, the decision of the Review Panel suffered from the same vices as those the subject of criticism by this Court in Frumar (at J[109]). The primary judge was satisfied that neither the Costs Assessor, nor the Review Panel, had erred in their approach. Her Honour was satisfied (at J[115]) that the Costs Assessor had reviewed all the bills, and did not misunderstand the work done, did not fail to consider items of work, and did not limit his consideration to the matters expressly identified in his Statement of Reasons (at J[81]). Her Honour was satisfied (at J[120]) that the Costs Assessor identified the time he regarded as appropriately taken to undertake particular work, at the hourly rate he found appropriate, and that his conclusion was arrived at on the basis of that task as set out in his Statement of Reasons (at J[81]-[82]). Her Honour also rejected (at J[134]) the contention that the Review Panel had erred.
On the issue of proportionality, the primary judge found that the difficulty that YB2 faced was that the documentation revealed that YB2 had failed to provide Adam with essential information such as adequate written advice and as to the costs capping procedure. Her Honour noted (at J[145]) that, when cross-examined, Adam had said that he had expected to get "all of his legal fees back if he won". Thus, on the issue of proportionality, any reliance on Adam having "asserted" that there "would be no compromise" and on Adam having raised issues as to the validity of the wills, was undermined by the fact that Adam was addressing those issues "in the absence of any or any proper advice" (at J[144]). Her Honour found (at J[145]) that the Review Panel was clearly aware of these factors and, in those circumstances, there was no error in the Review Panel's assessment of the proportionality of costs incurred.

Consideration

Before turning to the substance of the contentions made by YB2, it should be observed that, save as regards ground 1A of the amended summons (being Contention Three, as described above at [8]), YB2's complaints were, properly understood, not complaints of jurisdictional error or error of law on the face of the record, but were more properly characterised as an attempt to reagitate matters which had (in substance) failed before each of the Costs Assessor, the Review Panel and the primary judge, in circumstances in which the amount in issue was something in the region of $43,000.00. This application demonstrates the importance of a careful focus upon the nature of the error relied upon if such applications are not to lead to a disproportionate burden upon both litigants and the Court.

Contention One

By Contention One, YB2 contends that the primary judge erred in not finding that the Costs Assessor adopted a global approach, contrary to Frumar, and that the Review Panel adopted or repeated that error. I have already set out the substance of YB2's submissions in support of Contention One. In substance, these depend upon the underlying contentions that: 1. Frumar requires, as a matter of methodology, that a costs assessor must go through the assessment, working out what costs are reasonable, what costs are unreasonable, overcharging or disproportionate, and that that methodology must be apparent from the reasons given for the assessment; and 2. The Costs Assessor and the Review Panel failed to comply with that methodology, and that the failure of the primary judge to identify such error(s) was either jurisdictional error or error of law on the face of the record.
Both contentions should be rejected.
As to Frumar, I have set out relevant parts of this Court's reasons and conclusions above (at [12]-[16]). The error identified was a failure to comply with the applicable statutory obligation to give reasons. For that reason alone, Frumar does not support YB2's contentions. Moreover, the reasoning given by the costs assessor in Frumar made it clear that the costs assessor there had opted for assessment of "an overall fee for professional costs" as the "best method of assessment". Having regard to that, Giles JA found (at [58]) that the costs assessor had, from his own experience, determined what fee was fair and reasonable rather than considering proof or otherwise of the items in the bill of costs.
It was in that context that Giles JA made observations as to what his Honour regarded as the inadequate reasons given by the costs assessor. The reasoning of Giles JA in Frumar (at [59]-[60]) should not be read as dictating that any particular methodology should be adopted on an assessment of costs. Meagher JA in Ahern (at [92]) held that a line by line assessment is not required and that the Review Panel had not erred, in that case, by taking a "percentage" approach. Consistent with this, it is for a costs assessor and review panel to determine the appropriate method of assessing costs in the particular case before them, provided that is consistent with the statutory obligations under s 200 and, as incorporated by reference, s 172 of the Uniform Law. The prescriptive approach taken by YB2 in this application finds no support either in Frumar or in the applicable statutory provisions.
In any event, the errors alleged by YB2 are not made out. As is apparent from his Statement of Reasons, the Costs Assessor reviewed each invoice, the objections and response (at [48]), clearly considered the amount at stake and the complexity of the issues (at [51]-[53]), considered what work had been undertaken in preparing the matter for hearing noting particular matters which supported a conclusion that excessive claims had been made (at pt 8) and considered the issue of proportionality (at pt 9). The Costs Assessor then explained that he had attempted to deduct claims he regarded as excessive or duplicated and to apply an hourly rate to them, and explained this by setting out a number of categories of work and his allowances in relation thereto. YB2's contention that the Costs Assessor had in effect applied a global approach, albeit by reference to categories of work, should be rejected.
Moreover, there is no error in the Review Panel's conclusions as to this (as set out at [49] above). In any event, the Review Panel itself considered a vast amount of material and reached its own conclusion in its Statement of Reasons (at the first [15.13]) that it would not have allowed, on an item by item approach, anything more than had been awarded by the Costs Assessor. There is no substance in YB2's complaint to the contrary.
In these circumstances there is no jurisdictional or other legal error in the primary judge's rejection of YB2's complaints in this regard. The primary judge's conclusions were plainly open to her Honour. Contention One should be rejected.

Contention Two

By Contention Two, YB2 contends that the Review Panel and the primary judge erred in endorsing the Costs Assessor's erroneous analysis of the issue of proportionality. As set out above (at [36]), YB2 accepts that proportionality to the subject matter in issue can properly be taken into account on an assessment of costs. That acceptance is unsurprising, given that s 172 of the Uniform Law expressly adverts to both the proportionality of the incurring of legal costs, and the proportionality of the amount of legal costs, as falling within the enquiry as to whether a law practice has charged costs that are "no more than is fair and reasonable in all the circumstances". As set out in more detail above, YB2's contentions focus upon the manner in which proportionality was applied.
Again, YB2's contention should be rejected. In this regard, it is unnecessary to consider the approach of the Costs Assessor as the Review Panel gave substantive independent consideration to the issue of proportionality in its Statement of Reasons (from the first [15.9] to the second [15.7] set out above at [49]). Contrary to YB2's submission, the Review Panel expressly had regard to the instructions given by Adam, and to the fact that Adam had initially indicated that there would likely be no compromise. However, as is relevant to the issue of proportionality, the Review Panel also had regard to the lack of advice given to Adam, in particular, as to matters that may well have influenced any instructions from Adam as to the desirability of settlement, having regard to the extent to which further legal costs would be incurred, and to the prospect of a costs capping order even if he was ultimately successful in the litigation. Far from failing to consider Adam's instructions, the Review Panel gave careful consideration to matters which diminished the weight that could be given to Adam's actual instructions on the issue of proportionality, bearing in mind that, as the primary judge found (at J[145], set out at [66] above), Adam was not being sufficiently advised to form any clear view as to what instructions he should be giving.
Moreover, it is apparent from the Review Panel's Statement of Reasons that it had regard to all of the very extensive material put before it. That material included YB2's file, and YB2's response to the Review Panel's requests for information, including written information going to Adam's instructions (set out at [55] above). In these circumstances, there is no substance in YB2's complaint that the Review Panel erred in approaching the issue of proportionality without considering Adam's instructions to YB2 in the course of the litigation. It was for YB2 to put such material before the Review Panel and the Review Panel did not err in reaching its conclusions on the basis of the material before it.
The primary judge was correct that the Review Panel did not err. Contention Two should be rejected.

Contention Three

By Contention Three (ground 1A of the amended summons), YB2 submits that the primary judge applied the wrong test in refusing leave to rely upon the Amirbeaggi Affidavit. Given the limited manner in which this contention was advanced, it can be dealt with relatively briefly.
As set out above, this contention relies upon a construction of the primary judge's reasons (at J[82]) as indicating that her Honour approached the question of whether to grant leave to rely on the Amirbeaggi Affidavit on the basis that leave would only be granted if it was "fresh evidence". However, her Honour's reasons should not be so construed.
The primary judge's reasons (at J[82]) must be read in context. Her Honour correctly directed herself (at J[62]) as to the terms of s 89, including s 89(4), of the Application Act. Her Honour also extracted (at J[64]) paragraphs from the judgment of Meagher JA in Gilmore Finance Pty Ltd v Aesthete No 3 Pty Ltd [2020] NSWCA 114 at [7], which included identification that, in an appeal by way of rehearing, error can be demonstrated "having regard to all the evidence now before the appellate court". Then her Honour extracted (at J[68]) Basten AJA's reasons in Amirbeaggi v EB [2023] NSWCA 108 at [52], where his Honour observed that an appeal to the District Court from a decision of a review panel is one "for the purposes of which further evidence may be adduced". Her Honour then considered matters going to the relevance of the Amirbeaggi Affidavit, proportionality, and why the material could have been expected to have been produced before the Review Panel. As a matter of substance, these matters would properly be taken into account in considering, in the exercise of the primary judge's discretion, whether to grant leave to rely upon further evidence. They go well beyond considering whether the evidence was properly described as "fresh evidence". As this shows, the primary judge did not approach her statutory task as if evidence had to be "fresh evidence" for leave to be granted under s 89(4) of the Application Act.
Nor do the primary judge's reasons (at J[82]) suggest that her Honour had applied the threshold applicable to the reception of "fresh evidence" to her determination that YB2 should not be given leave to rely upon the Amirbeaggi Affidavit. All that her Honour said in that paragraph was that the claim for procedural fairness had to be determined on the basis that "there was no "fresh evidence" for any of the grounds of appeal." That was an apt description of the circumstances given that her Honour had already determined (at J[80]) that the Amirbeaggi Affidavit should be "struck out", which language should be understood as rejecting the application for leave to rely upon this affidavit on the appeal.
It follows that Contention Three, being ground 1A of the amended summons, should be rejected.

Conclusion

In light of my reasons as set out above, the amended summons should be dismissed. As Adam did not take part in the application for judicial review, it is not apparent that any order as to costs is required.
Accordingly, I propose the following order: 1. The amended summons filed 25 March 2024 is dismissed.
GRIFFITHS AJA: I agree with Stern JA.

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: 14 June 2024

Legal Profession Act 1987(NSW)

Legal Profession Uniform Law Application Regulation 2015(NSW)

Uniform Law, the Legal Profession Uniform Law Application Regulation 2015(NSW)

(the "2015 Regulation"), the Legal Profession Uniform General Rules 2015(NSW)

HEADNOTE [This headnote is not to be read as part of the judgment] The first respondent, Mr Adam Poche ("Adam"), was party to a family provision claim in the Supreme Court of New South Wales. Adam sought an increase in his share of his mother's estate to $600,000. The applicant, A.C.N. 627 087 030 Pty Ltd t/as Yates Beaggi Lawyers ("YB2"), acted for Adam in his family provision claim during the period 30 September 2018 until 13 May 2020. Following a three day hearing before Henry J in July 2019, Adam's provision under the estate was increased to $350,000. Adam's costs in relation to the family provision claim were approximately $627,110.72, and were capped to the amount of $125,000. On 12 August 2020, Adam applied to a costs assessor (the "Costs Assessor") for an assessment of costs. The Costs Assessor assessed the fair and reasonable costs for the work of YB2 between the period 17 September 2018 and 13 August 2019, under s 199 of the Legal Profession Uniform Law 2014 (NSW) (the "Uniform Law"), as $268,433.88. YB2 had invoiced Adam $366,975.03 by way of legal costs and disbursements over this period and so, on the Costs Assessor's findings, YB2 was required to refund the sum of $98,541.15 to Adam. On 3 June 2021, YB2 applied to a review panel (the "Review Panel") for review of the Costs Assessor's determination pursuant to s 83 of the Legal Profession Uniform Law Application Act 2014 (NSW) (the "Application Act"). YB2 contended, amongst other review grounds, that the Costs Assessor had made arbitrary allowances for a range of categories of work, had erred in applying a global approach in assessing YB2's invoices, failed to take into account various aspects of the matter and relied on irrelevant considerations. Following its assessment, including of the parties' submissions, the court book which was before Henry J and file documents comprising some 6,000 pages, the Review Panel affirmed the Costs Assessor's determination. YB2 appealed to the District Court of New South Wales under s 89(1)(a) of the Application Act. YB2 contended that the Costs Assessor had erred in approaching his task in a manner inconsistent with the authority of this Court in Frumar v The Owners of Strata Plan 36957 (2006) 67 NSWLR 321; [2006] NSWCA 278, that the Review Panel had adopted the Costs Assessor's erroneous approach and in any event, the decision of the Review Panel suffered from the same vices as those the subject of criticism by this Court in Frumar. In addition, YB2 contended that the Review Panel erred in its conclusions on proportionality in not giving proper consideration to the retainer that YB2 had with Adam. Before the primary judge, YB2 also sought leave to rely upon an affidavit of Mr Farshad Amirbeaggi (the "Amirbeaggi Affidavit") for the purpose of establishing the applicant had been denied procedural fairness. The primary judge was satisfied that neither the Costs Assessor, nor the Review Panel, had erred in their approach, and that there was no error in the Review Panel's assessment of proportionality. Her Honour also "struck out" the Amirbeaggi Affidavit. YB2 applied for judicial review of the primary judge's decision pursuant to s 69 of the Supreme Court Act 1970 (NSW). The principal contentions in the application, all of which YB2 contended constituted an error of law on the face of the record or jurisdictional error, were: (i) Whether the Costs Assessor erred in applying a test on an assessment of costs under s 199 of the Uniform Law that was inconsistent with the authority of this Court in Frumar, and whether the Review Panel and Primary Judge erred in endorsing the error of the Costs Assessor; (ii) Whether the Costs Assessor erred in giving proportionality "a preeminent role to play" in his assessment of solicitor-client costs, and whether the Review Panel and the primary judge erred in endorsing the approach of the Costs Assessor in this regard; and (iii) Whether the primary judge misapplied s 89(4) of the Application Act in viewing the question whether leave should be granted under s 89 of the Application Act to YB2 to rely upon the Amirbeaggi Affidavit as additional evidence on its appeal against a decision of a review panel solely "through the conceptual lens of fresh evidence as opposed to the full terms of the provision." The Court (Stern JA, Kirk JA and Griffiths AJA agreeing) held, dismissing the appeal: As to the characterisation of the complaints as jurisdictional error or error of law on the face of the record (1) Save as regards Contention Three, YB2's complaints were, properly understood, not complaints of jurisdictional error or error of law on the face of the record, but were more properly characterised as an attempt to reagitate matters which had (in substance) failed before each of the Costs Assessor, the Review Panel and the primary judge. This application demonstrates the importance of a careful focus upon the nature of the error relied upon if such applications are not to lead to a disproportionate burden upon both litigants and the Court: [1] (Kirk JA), [67] (Stern JA), [86] (Griffiths AJA). As to Contention One (2) The error identified in Frumar was a failure to comply with the applicable statutory obligation to give reasons. Frumar should not be read as dictating that any particular methodology should be adopted on an assessment of costs. It is for a costs assessor and review panel to determine the appropriate method of assessing costs in the particular case before them, provided that is consistent with the statutory obligations under s 200 and, as incorporated by reference, s 172 of the Uniform Law. The prescriptive approach taken by YB2 in this application finds no support either in Frumar or in the applicable statutory provisions: [1] (Kirk JA), [70]-[71] (Stern JA), [86] (Griffiths AJA). Frumar v The Owners of Strata Plan 36957 (2006) 67 NSWLR 321; [2006] NSWCA 278; Ahern v Aon Risk Services Australia Ltd [2021] NSWCA 166, considered. (3) In any event, the Costs Assessor reviewed each invoice, the objections and response, clearly considered the amount at stake and the complexity of the issues, considered what work had been undertaken in preparing the matter for hearing noting particular matters which supported a conclusion that excessive claims had been made and considered the issue of proportionality. The Costs Assessor then explained that he had attempted to deduct claims he regarded as excessive or duplicated and to apply an hourly rate to them, and explained this by setting out a number of categories of work and his allowances in relation thereto. YB2's contention that the Costs Assessor had in effect applied a global approach, albeit by reference to categories of work, should be rejected: [1] (Kirk JA), [72] (Stern JA), [86] (Griffiths AJA). (4) Moreover, there is no error in the Review Panel's conclusions as to this and in any event, the Review Panel itself considered a vast amount of material and reached its own conclusion in its Statement of Reasons that it would not have allowed, on an item by item approach, anything more than had been awarded by the Costs Assessor. There is no substance in YB2's complaint to the contrary: [1] (Kirk JA), [73] (Stern JA), [86] (Griffiths AJA). As to Contention Two (5) It is unnecessary to consider the approach of the Costs Assessor as the Review Panel gave substantive independent consideration to the issue of proportionality in its Statement of Reasons. It is apparent from the Review Panel's Statement of Reasons that it had regard to all of the very extensive material put before it. In these circumstances, there is no substance in YB2's complaint that the Review Panel erred in approaching the issue of proportionality without considering Adam's instructions to YB2 in the course of the litigation. It was for YB2 to put such material before the Review Panel and the Review Panel did not err in reaching its conclusions on the basis of the material before it: [1] (Kirk JA), [75]-[77] (Stern JA), [86] (Griffiths AJA). As to Contention Three (6) This contention relies upon a construction of the primary judge's reasons as indicating that her Honour approached the question of whether to grant leave to rely on the Amirbeaggi Affidavit on the basis that leave would only be granted if it was "fresh evidence". However, her Honour's reasons should not be so construed: [1] (Kirk JA), [80] (Stern JA), [86] (Griffiths AJA). (7) The primary judge's reasons must be read in context. Her Honour correctly directed herself as to the terms of s 89, including s 89(4), of the Application Act, and the relevant case law. Her Honour then considered matters going to the relevance of the Amirbeaggi Affidavit, proportionality, and why the material could have been expected to have been produced before the Review Panel. As a matter of substance, these matters would properly be taken into account in considering, in the exercise of the primary judge's discretion, whether to grant leave to rely upon further evidence. They go well beyond considering whether the evidence was properly described as "fresh evidence". As this shows, the primary judge did not approach her statutory task as if evidence had to be "fresh evidence" for leave to be granted under s 89(4) of the Application Act: [1] (Kirk JA), [81]-[82] (Stern JA), [86] (Griffiths AJA).

JUDGMENT

KIRK JA: I agree with Stern JA.
STERN JA: By amended summons filed on 25 March 2024, the applicant, A.C.N. 627 087 030 Pty Ltd t/as Yates Beaggi Lawyers (who, for reasons which will become apparent, I will refer to as "YB2") seeks review under s 69 of the Supreme Court Act 1970 (NSW) of a decision of the District Court of New South Wales (Gibson DCJ) on 13 December 2023 dismissing an appeal from a decision of a review panel (the "Review Panel") on an application for review of a decision of a costs assessor (the "Costs Assessor"). YB2 seeks orders setting aside the orders of Gibson DCJ on 13 December 2023 and remitting the matter to the District Court to be dealt with in accordance with law.
Adam Poche (the first respondent, whom for convenience I will refer to as Adam) filed a submitting appearance. Consistent with the principle in The Queen v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 at 35-36; [1980] HCA 30, the second respondent also filed a submitting appearance. There was thus no contradictor on this application.
In the amended summons, YB2 advanced five grounds of review. On the hearing of the application, YB2 abandoned one ground of review. As regards the other grounds, Senior Counsel for YB2 explained that YB2, in essence, makes three contentions in this application.
First, YB2 contends that the Costs Assessor erred in applying a test on an assessment of costs under s 199 of the Legal Profession Uniform Law 2014 (NSW) (the "Uniform Law") that was inconsistent with the authority of this Court in Frumar v The Owners of Strata Plan 36957 (2006) 67 NSWLR 321; [2006] NSWCA 278. The legal error was identified by Senior Counsel for YB2 as follows: "The legal error is the application of a test that is a departure from the requirements of the legislation as interpreted and applied by this Court in Frumar. That is that one cannot apply a global approach, which we say has been done here, a global approach to the assessment as opposed to undertaking an assessment of the work that has actually been done as opposed to the approach that's been taken here."
YB2 contends that both the Review Panel and Gibson DCJ (who, for convenience, I will describe as the primary judge) erred in endorsing the error of the Costs Assessor. This is relied upon as either an error of law on the face of the record or as jurisdictional error ("Contention One").
Second, YB2 contends that the Costs Assessor erred in giving proportionality "a preeminent role to play" in his assessment of solicitor-client costs. YB2 submits, again, that both the Review Panel and the primary judge erred in endorsing the approach of the Costs Assessor in this regard and, again, relies upon this as either an error of law on the face of the record or as jurisdictional error ("Contention Two").

What constitutes the "record" for the purpose of s 69(4) of the Supreme Court Act?

One question arising in this application is as to what "the record" is for the purposes of YB2's contentions alleging error of law on the face of the record. As YB2 submits, and as was recently observed in Fong BHNF Fong v Weller [2024] NSWCA 46 at [32] (Kirk JA, Gleeson and Mitchelmore JJA agreeing), there is some tension in this regard as between the judgments of White JA and Meagher JA in Ahern v Aon Risk Services Australia Ltd [2021] NSWCA 166 at [22]-[36] (Meagher JA) and [108]-[120] (White JA). It is unnecessary to resolve that tension here. Even if all of the documents which YB2 contends should be taken into account as being incorporated by reference into the record for this purpose are considered, being the Costs Assessor's Certificate of Determination and Statement of Reasons, the Review Panel's Certificate of Determination and Statement of Reasons, and the Amirbeaggi Affidavit, there is no error of law.

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