Ahern v Aon Risk Services Australia Ltd

The issue of the summons being out of time

1. Although par 2 of the first defendant's notice of motion seeks dismissal of the summons on the ground that it is incompetent because it is out of time, the plaintiffs have now applied for an extension, in the manner and circumstances described below. The first defendant no longer contends that the summons is incompetent on that basis but submits that the extension should be refused.
2. The time limit relied upon by the first defendant is prescribed in r 50.12 of the Uniform Civil Procedure Rules (UCPR), pursuant to which the plaintiffs' summons for leave to appeal was required to be filed within 28 days after the date on which notice of the review panel's decision was given to the plaintiffs. As explained below, that was, at latest, 8 January 2019. Time expired no later than 5 February 2019. The plaintiffs' summons was filed on 21 September 2021, more than two years and seven months out of time.
3. Relevant dates in the procedural chronology are as follows: 21 Sep 21 Plaintiffs' summons filed claiming leave to appeal at par 1 of the orders sought but not seeking an extension of time. 25 Oct 21 First defendant's notice of motion filed, seeking that the summons be set aside by reason of having been filed out of time and that it be dismissed as incompetent on that ground and also because leave had not been granted. 17 Nov 21 First defendant's notice of motion listed for hearing on 11 May 2022. 25 Feb 22 First defendant consented to the filing of an amended summons in which par 1A would be added to the orders sought, seeking an extension of time. 3 May 22 Plaintiffs' amended summons lodged with registry but rejected.
4. At the commencement of the hearing of the first defendant's notice of motion on 11 May 2022 the plaintiffs sought to have it adjourned, to be heard together with the final hearing of the summons. I refused that application. The plaintiffs allowed six months to pass, after the notice of motion was set down, before lodging in the registry their amended summons by which, for the first time, they sought an extension of the 28 day limit prescribed in r 50.12. The extension should have been claimed in the summons when it was filed: r 50.12(2). Had the extension application not been formalised prior to the hearing of the notice of motion, at least to the extent of preparing and attempting to file an amended summons, there would have been no basis for the Court to consider an extension when the first defendant's application for dismissal of the summons was heard: Asuzu v Council of the New South Wales Bar Association [2012] NSWCA 406 at [37]-[41] (Ward JA).
5. On 28 March 2022 the plaintiffs filed 24 pages of written submissions in opposition to the notice of motion, single spaced and closely typed, with 11 pages of attached schedules. Those submissions assert at par 3 that the plaintiffs have: amended the summons to seek an extension of time which is an issue to be determined on the leave application and should have been withdrawn by the first defendant.
6. That submission is erroneous at a number of levels. First, the amended summons had not been filed at the date of those submissions. It was not submitted to the registry until seven weeks later, which was just eight days before the first defendant's notice of motion was listed to be heard. When submitted, the amended summons was rejected in the absence of an order permitting the amendment. Instead of notifying the first defendant of this and seeking a consent order for leave to file the amended document, the plaintiffs simply did not serve their rejected document. The first defendant was not aware that the amended document had been submitted to the registry until after the hearing of its notice of motion had commenced. During the course of the hearing the plaintiffs' counsel incorrectly stated that the amended document had been filed. A copy bearing the registry's receipt stamp was produced and nothing was said about the subsequent rejection of that document.
7. Secondly, extension of time is not "an issue to be determined at the leave application". The requirement of leave under s 385(3) is a filter that the Court applies to limit appeals from review panels. Leave is granted only where justice so requires, taking into account the demands that a grant of leave places upon the resources of the Court, the burden that entertaining such an appeal places upon other parties and the delays that are caused to other litigants: see authorities cited at [53]-[57] below. To have the Court consider those criteria and decide whether leave to appeal will be granted, the plaintiffs first need an extension of time of more than two and a half years. The factors upon which the application for extension is to be determined include the apparent strength or otherwise of the proposed leave application but they also include any explanation there may be for the delay and any prejudice that the first defendant may have suffered: see cases discussed at [39]-[42] below. These additional and different considerations and the threshold nature of the time limit issue dictate that Court should determine whether or not time is to be extended before embarking upon hearing the leave application under s 385(3).
8. Further, the plaintiffs written submission assumes that the Court would hear at the same time both the application for leave and the appeal, in the interests of economy of hearing time in case leave should be granted. That is not a course that the Court would take in this case where the first defendant strongly contests the application for leave and where, as a matter of first impression, the plaintiffs face significant difficulties in obtaining leave to appeal.

The issue of the plaintiffs requiring leave to appeal

1. The summons itself, by the first paragraph of the orders sought, comprises an application for leave under s 385(3). At the hearing of the notice of motion the first defendant accepted that this is the correct procedure for seeking leave, as prescribed by r 50.12(2), and that the summons to commence the appeal is not incompetent for want of a grant of leave antecedent to its filing. The first defendant therefore does not now press its contention that the summons is incompetent, on any ground. My understanding at the commencement of the hearing was that the first defendant nevertheless sought to bring forward the question of whether leave ought to be granted under s 385(3), for determination on a final basis pursuant to its notice of motion. However, the first defendant's submissions accept that, following abandonment of the contention of incompetence, the merits of the leave application are only to be examined on this notice of motion according to the test applicable to a strike out application pursuant to r 14.28: see par 3 of the relief sought in the notice of motion.
2. This requires, not that the plaintiffs' application for leave under s 385(3) be determined on its merits, but that the first defendant must endeavour to demonstrate that the application is "so obviously untenable that it cannot possibly succeed" or that it is "manifestly groundless": General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128-129 per Barwick CJ. The merits of the plaintiffs' leave application, or the lack thereof, also fall for consideration as a factor to be taken into account in determining whether the time for filing the summons should be extended under r 50.12(1)(c).

The proceedings that gave rise to the costs assessment

1. The plaintiffs' application for costs assessment arose out of earlier proceedings. In 2006 the plaintiffs were the owners of a home and contents that were damaged by fire on 28 June in that year. They found that they were grossly under insured and they held the first defendant, their insurance broker, responsible. The plaintiffs commenced proceedings against the first defendant on 28 June 2012 claiming damages for professional negligence and pleading other causes of action.
2. The hearing of the professional negligence action commenced on 2 February 2015 with an estimate of 10 days. Settlement was reached on 10 February 2015 on the terms of a deed that included the following terms: 1 The parties agree to resolve the proceedings on the basis of the Short Minutes of Order attached hereto and on the terms of this Deed. 2 [The first defendant] shall pay the Plaintiffs the sum of $1,375,000 (Settlement Sum) within 21 days of the date of this Deed. 4 The Settlement Sum and the Plaintiffs' costs once agreed or assessed shall be paid to [the plaintiffs] by bank cheque, or by depositing the funds directly into their solicitor's Trust Account […]. 5 Subject to paragraph 6 below, on receipt of the Settlement Sum by [the plaintiffs] or their solicitor, each of [the plaintiffs] release and discharge the Defendants and each of them from all Claims either at law or in equity or arising under the provision of any statute which [the plaintiffs] have now or may in the future have had against the Defendants, or any of them, by reason of or in any way connected to the facts, matters and circumstances referred to in the pleadings filed in the Proceedings or the evidence given at the hearing of or served in the Proceedings. 6 Nothing in paragraph 5 affects the liabilities of the parties pursuant to this Deed, pursuant to the Short Minutes of Order attached hereto or for any cost orders in the Proceedings.
3. In accordance with the deed the parties consented to the Court making orders in the following terms, on 10 February 2015: 1 Proceedings dismissed. 2 Vacate all cost orders in favour of the defendants. 3 In lieu thereof, order that each party pay his, her or its own costs of the matters the subject of order 2. 4 Save for the costs the subject of orders in paragraphs 2 and 3 above, order that the first defendant pay the plaintiffs' costs of the proceedings as agreed or assessed.

The costs assessment and review

1. The first defendant paid the agreed settlement sum but the parties could not agree on the quantum of the plaintiffs' costs to be paid under order 4. The following is a chronology of some of the more important subsequent events in the costs assessment process: 6 Oct 16 The plaintiffs applied under s 353 of the Legal Profession Act to the Manager, Costs Assessment for an assessment of their costs under order 4. The total of the plaintiffs' bill for assessment, including disbursements, was $1,748,077. 17 May 17 Assessor Mr Connery issued a final certificate for $1,280,079.52. The assessor published eight pages of reasons, dated 7 April 2017, and certified his own costs of making the assessment at $21,040.25. 16 Jun 17 Both the plaintiffs and the first defendant filed applications for review of the assessor's determination. 26 Sep 18 The review panel, constituted by Messrs Wall and Sharpe, issued their certificate of determination for $1,178,551.82. This was a reduction of $101,527.90 relative to the assessor's determination. The review panel certified their own costs of the review at $14,238.63. They issued reasons comprising 29 pages plus annexures.
2. Although issued, the certificate of determination could not be received by either of the parties until the costs of the review panel had been paid. The plaintiffs paid those costs on 22 November 2018 and they received notice of the determination that day. However the certificate with respect to the panel's costs erroneously stated that those costs had been paid by the first defendant. An amended certificate was issued on 28 November 2018. On 8 January 2019 there was issued to the parties an amended certificate of determination of the plaintiffs' costs. This was for the same amount and the respect in which it was amended is not apparent on the face of the document. However, for abundant caution, 8 January 2019 should be taken as the material date for the purpose of the running of time under UCPR r 50.12.
3. In order to understand both the grounds of appeal from the review panel's decision for which leave is now sought in this Court and the grounds of appeal that have already been litigated in the District Court, it is necessary to refer to three aspects of the decisions of the assessor and of the panel, namely: 1. the panel's decision to undertake a complete reassessment of the costs claimed, item-by-item; 2. the hourly rates of solicitors and staff; 3. the costs of the assessment process, including time spent by the plaintiffs' principal solicitor, disbursements outlaid on a costs consultant and a firm of specialist costs lawyers and the fee paid to the Court on the application for assessment.

The Panel's complete item-by-item reassessment

1. The panel decided to make a complete item-by-item reassessment of the costs. They perceived that to be necessary in view of the number and breadth of the grounds raised by the plaintiffs and by the first defendant in their respective applications for review. The panel gave these reasons for taking that course: 9.1 The broad positions of the parties are that Aon assert that the amount assessed was too high. Ahearn & Clancy assert at least in grounds 1 and 2 of the Ahearn & Clancy grounds that the amount was too low. At ground 10 in the Aon grounds, Aon asserts that the assessor's decision that Aon pay the costs of assessment was incorrect. At grounds 3, 4 and 5 of the Ahearn & Clancy grounds, Ahearn & Clancy assert that the assessor did not allow enough to Ahearn & Clancy for the costs of negotiating costs, compiling the bill and dealing with the assessment process. 9.2 Thus both parties assert that the assessor's determination should be set aside and that the panel should substitute its determination, both in relation to the costs of the Supreme Court proceedings, and in relation to the assessor's costs and the costs of assessment. 9.3 Ultimately the panel did set aside the assessor's determination and reassessed the costs, largely because both parties sought that. […] 9.6 The panel undertook and completed a complete reassessment of the costs claimed. […] 10.5 Having had access to a bill marked by the assessor, the panel is satisfied that the assessor undertook the assessment in a through and detailed fashion, applying the correct principles. To the extent that the panel's reassessment varies from that of the assessor, the differences fall within the variation one would expect from assessor to assessor (or in this case from assessor to panel). The panel found no significant errors of principle. It may have been open to the panel to affirm the assessor's determination and provide that marked bill as part of the panel's reasons. 10.6 However where an assessor in fact conducts an item-by-item assessment of the costs, then the assessor should normally provide that item-by-item assessment as part of the assessor's reasons. The general reasons provided by the assessor were certainly adequate to deal with the general objections. The reasons of an assessor must reflect what the assessor actually did. As the assessor actually undertook an item-by-item assessment, normally the assessor would have to provide, as part of the assessor's reasons, the item-by-item assessment actually undertaken. 10.7 In any event, the panel has itself undertaken an item-by-item assessment. The panel has made available to the parties a marked bill comprising the assessor's markings, and then further markings by the panel, and a schedule indicating items where the panel's findings were different to those of the assessor. 10.8 As the panel undertook a complete reassessment of the costs, and the panel has provided over 700 pages of details of that reassessment, the panel's view as to whether or not the assessor was obliged to provide that material is now of little importance.
2. The plaintiffs' evidence and submissions do not establish how much is at issue on the question of whether the panel were justified in reassessing item-by-item, taking that question in isolation. The panel's certificate was for a figure $101, 527 less than the assessor's certificate. Of this, approximately $70,000 appears to have been due to the panel allowing less than the assessor did for the costs of the assessment process, which is a separate question. By deduction, the amount in issue solely on the plaintiffs' complaints about the panel having undertaken a complete item-by-item reassessment seems to be about $30,000.

Hourly rates

1. The hourly rates claimed by the plaintiffs varied according to the seniority and qualifications of each person who performed work. As an example, the highest hourly rate was $550 for Mr Chris Clancy, the solicitor who has at all times had conduct of the plaintiffs' proceedings against the first defendant. The lowest was $175 claimed for law clerks. The assessor assessed professional costs at rates lower than those claimed, in every category. The reduction that appears to have caused the greatest dissatisfaction to the plaintiffs was the allowance of Mr Clancy's time at $460 per hour, a reduction of 16.4% on the rate claimed. The review panel affirmed the rates adopted by the assessor.
2. The total amount claimed for professional costs, according to a schedule to the plaintiffs' written submissions at Court Book 114 (CB114), was $1,045,998 exclusive of GST. That equated to $1,150,598 inclusive of GST, in a total bill including disbursements of $1,748,077. The assessor allowed for professional costs the sum of $738,411 inclusive of GST, a reduction of $412,187. Part of that reduction was attributable to disallowance of excessive hours and part was attributable to the reduced hourly rates.
3. By the plaintiffs' summons, one of the grounds for which they seek leave to appeal concerns the merits of the reduction in hourly rates. In order to demonstrate the dollar value of that issue, the plaintiffs have multiplied the total amount of fees that were originally claimed for each professional and each staff member by the applicable percentage of reduction in hourly rates that the assessor applied. Mr Clancy's fees were originally claimed at $840,237 (excl GST) and the assessor reduced his hourly rate by 16.4%. This is said by the plaintiffs to have generated a reduction in allowance for Mr Clancy of $137,799. A similar calculation for one of the law clerks is: $129,904 x 52.5% = $68,070 (excl GST). Adding up all of these amounts and adding GST produces a figure of $249,819. The plaintiffs assert that that sum is in issue solely on the question of whether the assessor and the panel were justified in reducing the hourly rates.
4. The plaintiffs' calculation is unsound. It overstates the sum in issue. The calculation cannot be properly made by applying percentages to the total claimed hours and fees of each solicitor and staff member. Those hours were significantly disallowed by the assessor and by the panel on grounds such as that the work was wholly unnecessary or excessive or not reasonably claimable against the first defendant. The effect of reducing the hourly rates, as a single factor, can only be calculated by applying the respective percentages of reduction to the number of hours for each person that were actually allowed, not by applying them to the number of hours claimed. The Court does not have the information to make the correct calculation but there is no doubt it would reveal that the figure in issue is significantly lower than $249,819.
5. At par 4.1 of his reasons the assessor said this: 4.1 In assessing what are fair and reasonable costs, I have had regard to the question of proportionality not only in terms of the quantum of the costs as against the value of the subject proceedings, but also in terms of the complexity of the matter in the conduct of the parties, importance of the proceedings to the parties and the orders made by the Court. The outcome of this matter is but one of a number of factors to which I have had regard, while I must consider the factors set forth in s 364 of the Act.
6. At par 4.2 the assessor quoted s 364 of the Legal Profession Act 2004 and acknowledged his obligation to take into account the considerations listed in subs (2). Section 364 includes the following subsections: 364 Assessment of costs - costs ordered by court or tribunal (1) In conducting an assessment of legal costs payable as a result of an order made by a court or tribunal, the costs assessor must consider: (a) whether or not it was reasonable to carry out the work to which the costs relate, and (b) whether or not the work was carried out in a reasonable manner, and (c) what is a fair and reasonable amount of costs for the work concerned. (2) In considering what is a fair and reasonable amount of legal costs, a costs assessor may have regard to any or all of the following matters: (a) the skill, labour and responsibility displayed on the part of the Australian legal practitioner or Australian-registered foreign lawyer responsible for the matter, (b) the complexity, novelty or difficulty of the matter, (c) the quality of the work done and whether the level of expertise was appropriate to the nature of the work done, (d) the place where and circumstances in which the legal services were provided, (e) the time within which the work was required to be done, (f) the outcome of the matter. The assessor gave no additional reasons specific to the issue of reduction in hourly rates.
7. The reasons of the review panel with respect to hourly rates were as follows: 12.2 It seems likely that what is intended by Aon ground 4 [that the assessor did not address "the disproportion between the expectations of [the plaintiffs], the resulting settlement figure in the amount of costs allowed"] is that the assessor should have considered (and the panel should consider) that [the plaintiffs] originally claimed over $3 million, but settled for $1.375 million. The panel accepts that is correct. The assessor also accepted that. […]. 12.3 [The panel quoted par 4.1 of the assessor's reasons]. The assessor recorded that "the outcome of this matter is but one of a number of factors to which I have had regard". 12.4 The panel can see no error in the approach of the assessor. 12.5 The assessor clearly took into account both the nature of the claim and the result. 12.8 It is clear the assessor applied the correct criteria, The assessor set out those criteria at 4.2 of the assessor's reasons. The assessor considered both the outcome of the matter, the complexity, novelty or difficulty of the matter, the quality of the work and whether the level of expertise was appropriate to the nature of the work done (as may be considered pursuant to ss364(2)). More broadly in considering whether it was reasonable to cany out the work and whether that work was carried out in a reasonable manner, an assessor can and should consider the amount in issue and the importance of the proceedings to the parties. The assessor did so. The panel finds no error of principle in the approach of the assessor. 12.9 In relation to the hourly rates, the assessor set out observations about the Supreme Court proceedings generally and the general principles, and then arrived at the hourly rates. 12.10 The panel reassessed costs. Having regard to the position of each of those who did the work (whether partner, solicitor, paralegal, law clerk etc), the experience of the person who did the work (that is the date of admission of that person), the type of work done, how the work was done in terms of how much was done by those on lower rates and how much was done by those on higher rates, the involvement of the barristers (both the junior barrister and the senior barrister), and having had access to the Supreme Court documents, and the [Costs Assessment Rules Committee - CARC] guidelines, the panel accepts and affirms the rates arrived at by the assessor for the work done. 12.11 […] When looking at the hourly rates, there is no presumption that the hourly rates claimed should be allowed. An assessor, (and if reassessing costs on review a panel) is not obliged to start with the hourly rates asserted. The assessor, and on reassessment the panel, must look at all the relevant factors and arrive at appropriate hourly rates for those who did the work The panel accepts that it is necessary to set out reasons for adopting particular rates. The decision on the hourly rates is connected to a great number of factors, the bulk of which are set out above by the panel Provided the reasons set out those relevant matters and the amount arrived at, sufficient reasons are given. 12.12 It is the opinion of the panel that the assessor gave reasons that were quite sufficient in relation to the hourly rates. 12.13 In any event, the panel has indicated the factors it considered, and the hourly rates it applied on reassessment. 20.1 The panel has dealt with the issue of hourly rates in section 12 above. The panel affirms the assessor's determinations regarding hourly rates.

Costs of the assessment process including filing fee

1. As to item (2) listed at [20] above, the plaintiffs' claim for their costs of the costs assessment included $66,421.43 inclusive of GST for professional fees of Mr Clancy, who apparently did all the work relating to the assessment process. It appears that the professional costs were reduced by the assessor on the basis that part of the work, such as proof reading the bill, should have been delegated to a junior solicitor: par 5.31 of the assessor's reasons. The amount of the reduction on this account is not readily ascertainable from the materials before the Court but may have been apparent from the bill of more than 700 pages as marked up by the assessor. The allowance of Mr Clancy's time at $460 per hour instead of $550 would, alone, have resulted in a reduction of the professional costs claimed in relation to the assessment process. The amount of that reduction is the subject of issue (1) above.
2. The claimed disbursements of the costs assessment process were $4,500 (excl GST) paid to a costs consultant, Mr Cordner, for perusing 5 boxes of files over more than 25 hours and $121,000 (excl GST) paid to a firm of costs specialists, DGT Costs Lawyers. The assessor made the following reductions: 1. Mr Cordner did not draft the itemised bill and the Assessor considered that his extensive perusal of the files was unjustified. Only six hours of general oral advice was allowed, totalling $1,050 (excl GST), a reduction of $3,450 (excl GST): par 5.31 of the assessor's reasons. 2. DGT Costs Lawyers fees were reduced to 8.5% of the professional costs assessed, which calculated out at $57,059.06, plus a further 70 hours at $275 per hour, being $19,250 (both amounts excl GST). The reduction in relation to DGT Costs Lawyers was $46,691 (excl GST).
3. The assessor's reasons for reducing the fees paid to Mr Cordner were clear, as noted at (1) in the paragraph above. His reasons for reducing the fees of DGT Costs Lawyers were substantially left to implication. In the amount certified by the assessor for the whole of the plaintiffs' bill, the component of professional costs was reduced by 35%. Self-evidently the work of the external costs consultants had been directed to propounding a bill that the assessor found to be inflated. It may be inferred that the assessor thought a fair and reasonable fee for those consultants would be a percentage of the professional costs that were upheld, supplemented with a substantial number of hours at the rate of $275.
4. The review panel reassessed the costs of the assessment process in the manner and for the reasons that they set out as follows: 18.13 The panel accepts that the amount claimed by [the plaintiffs' solicitors] for those [the reasonable costs of negotiating costs, compiling the application and the bill and the assessment process including responding to objections and the assessor's requirements] was too high. The assessor reduced the amount claimed. 18.14 The panel has decided to assess the costs of negotiating costs, compiling the application and the bill and the reasonable costs of dealing with the assessment process in a global fashion, having regard to the fact that some of the work done by [the plaintiffs' solicitors] was not done in a reasonable manner, resulting in a lower percentage of costs recovered both on the determination of the assessor and on the determination of the panel than should normally be the case 18.15 The panel disallowed all the fee items relating to these matters, and the expense items Nos 4336,4337 and 4338. The fee items the panel disallowed are set out in the schedule [to the reasons]. 18.16 Instead of those amounts, the panel is of the opinion that an amount of around 10% of the fees inclusive of GST allowed by the panel is a reasonable amount for the GST inclusive costs of the work in negotiating costs, compiling the bill and the application and dealing with the assessment process. That would come to $66,133.30. 18.17 The panel have also looked at the appropriate number of hours at various fee rates for doing that work. As a global assessment on that basis the panel would allow 200 hours at $275 per hour inclusive of GST for that work ($55,000), with 10 hours of supervision at $506 per hour inclusive of GST ($10,120). Thus on this basis, the panel would allow the amount of $ 65,120. 18.18 Looking at those two methods, the panel has resolved to allow in lieu of the fees and expense items disallowed for costs, the amount of $66,000 inclusive of GST for the costs of negotiating costs, compiling the bill, compiling the application, and dealing with the assessment process.
5. As to the Court fee on the application for assessment, the assessor allowed the full amount that had been paid by the plaintiffs and claimed by them in the assessment, being $17,480.77. The fee was obviously charged at 1% of the amount of the bill submitted for assessment. The assessor allowed this notwithstanding the significant amount and percentage by which the plaintiffs' costs were reduced in his certificate.
6. The panel reduced this to $13,000, being a little over 1% of the amount they finally certified - for the following reasons: 18.16 In respect of the filing fee, the panel is of the view that it may have been possible for an assessor to allow up to $1,300,000 in respect of the costs claimed. Thus the panel allow the sum of $13,000 as part of the filing fee, replacing the amount allowed by the assessor of the whole filing fee of $17,480.77.
7. Taking all of the panel's reductions together, the amount in issue on the plaintiffs' proposed appeal ground concerning the costs of the assessment process appears to be a little over $100,000.

Grounds of appeal for which leave is now sought in the summons

1. The Details of the Appeal in the amended summons are as follows, omitting superfluous argumentative verbiage: 1 The plaintiffs appeal the whole of the determination of the Costs Review Panel […] but limited to three issues […]: i the decision to conduct a further item by item reassessment of the costs of the substantive proceedings and not to confirm the assessor's determination in regard to his item by item assessment; ii the decision to reduce hourly rates to the extreme bottom end of the range of reasonable rates approved by the NSW Law Society's Costs Assessment Review Committee and iii the decision to reduce the costs of the costs negotiation and assessment process globally by two thirds. 2 The panel unfairly and unjustly exercised its discretion in respect of those three decisions above so as to redetermine costs, not by reference to either the court orders or the grounds for review of either party, which had all been rejected by the panel, but by applying a predetermined ratio of 66.67% of the costs allowed to costs and disbursements claimed. This ratio was achieved by the panel: i firstly, […] by giving primacy to a proportionality/ratio that costs allowed should be to the outcome, found to be the amount of the settlement sum […]; ii secondly, the panel then selected a manifestly unfair global reduction of the [costs of the assessment] to achieve the desired ratio […]; 3 In applying numerical proportionality, the panel unjustly and unfairly ignored their costs and disbursements actually paid by the plaintiffs […] and thereby disregarded the indemnity principle enshrined within the Act.
2. The above appear to be the appeal grounds for which leave is sought and I treat them as such, although they are supplemented in the summons with a further 16 numbered paragraphs. Numbers 1-7 of the additional paragraphs appear to supplement ground 1(i) above, paragraphs 8-10 supplement ground 1(ii) and paragraphs 12-16 supplement ground 1(iii).

Principles upon which extension of time may be granted

1. In Tomko v Palasty (No. 2) (2007) 71 NSWLR 61; [2007] NSWCA 369 at [55]-[58] Basten JA provided a non-exhaustive list, as follows, of considerations that are relevant to extensions of time in the comparable situation of a belated appeal to the Court of Appeal: 1 the length of the delay; 2 the reason for the delay; 3 whether the applicant has a fairly arguable case, and 4 the extent of any prejudice suffered by the respondent to the application.
2. To these his Honour added the following, from the judgment of Kirby J in Jackamarra v Krakouer (1998) 195 CLR 516 at [65] (with numbers added for ease of reference): [5] whether the delay was intentional or contumelious; or merely the result of a bona fide mistake or blunder; [6] whether the delay is that of the litigant or of its lawyers, with which the litigant should not be saddled; [7] where the default is that of a party's legal representatives, […] any considerations personal to the party which might have affected its ability to safeguard its own interests, for example, by applying pressure to its lawyers; [8] the extent to which any such prejudice [to the opposing party] may be remedied by an appropriate costs order.
3. In the same case, Hodgson JA (Ipp JA agreeing) made the following observations upon the interrelationship between the applicant's prospects of success in the proceeding for which an extension of time is sought and the adequacy of any explanation for delay: [14] In my opinion, there may be circumstances where it is appropriate to go further into the merits of the case of a person seeking an indulgence such as this, than to ask whether or not the case is fairly arguable. If such a person has a reasonable explanation of delay and the opponent does not have a strong case of prejudice, then a fairly arguable case is sufficient. However, if the explanation for the delay is less than satisfactory, or if the opponent has a substantial case of prejudice, then it may be relevant that the person seeking the indulgence shows that his or her case has more substantial merit than merely being fairly arguable.
4. In Gazecki v McCabes Lawyers Pty Ltd [2020] NSWCA 98 the applicant sought from the District Court an extension of the 28 day time limit within which to appeal a costs assessment, pursuant to s 89(1) of the Legal Profession Uniform Law Application Act 2014 (NSW) (the Legal Profession Uniform Act). The applicant was 30 days out of time. His application for extension was refused in the District Court. The judge applied the considerations referred to at [39] above, taken from Tomko v Palasty (No. 2), and followed the reasoning of Hodgson JA in that case. In the Court of Appeal the applicant sought both leave to appeal and judicial review of the decision of the District Court judge. Both applications were refused. At [16]-[22] Basten JA (with whom Leeming and Simpson JJA agreed) identified the considerations that had been taken into account at first instance and said that no legal error was disclosed.

Reasons for delay in the present case

1. On 19 December 2018 the plaintiffs filed in the District Court summons commencing an appeal from the decision of the Review Panel, as of right pursuant to s 384 of the Legal Profession Act 2004. That section is in the following terms: 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.
2. The summons was not served. On 21 March 2019 Mr Clancy told the District Court that "the file contains approximately 400 lever arch folders" and that he wished to file an amended summons. The amended summons was filed and served on 4 April 2019. In his judgment handed down on 1 May 2020, Ahern v Aon Risk Services Australia Limited [2020] NSWDC 159, Abadee DCJ summarised the grounds of appeal as follows (at [35]): (a) the Panel failed to give any or any adequate reasons for affirming the costs assessor's decision to reduce hourly rates (ground 1); (b) the Panel erroneously adopted an approach whereby it reassessed completely the costs assessment, rather than substituting the determination that the costs assessor should have made (grounds 2 & 3); and (c) the Panel failed to give reasons for deciding the issue of costs of the assessment as it did and erroneously adopted a global assessment of the costs of the negotiation and costs assessment process (ground 4).
3. The proceedings in the District Court progressed slowly and only came to a hearing on 22 April 2020. The hearing occupied three days. The first defendant contends that delays prior to hearing were due to dilatory conduct of the plaintiffs. I do not find it necessary to attribute blame in that respect because I do not consider that the plaintiffs' appeal to the District Court on grounds of law, whether prosecuted diligently or otherwise, provides any reasonable explanation for their failure to apply within time to this Court for leave to appeal on grounds involving reconsideration of fairness and reasonableness.
4. The three grounds in the District Court concerned the issues listed at [20] above, in relation to which the reasons of the assessor and of the panel have been extracted at [21]-[35]. The same three issues are the subject of the grounds in the plaintiffs' present leave application in this Court, set out at [37] above. The questions of law argued in the District Court, all concerning the adequacy of the panel's reasons for their determination of the very matters in respect of which it is now sought to have this Court conduct a new hearing upon fairness and reasonableness grounds, could have been raised in this Court in proceedings under s 385. The plaintiffs submitted to the contrary, asserting that ss 384 and 385 effect a "bifurcation" of appeal rights and citing Bobb v Wombat Securities Pty Ltd & [2013] NSWSC 757 at [17] and Cassegrain v CTK Engineering [2008] NSWSC 457 at [130]. The word "bifurcation" is not self-explanatory as an argument in itself and the authorities cited do not support the plaintiffs' submission.
5. The grounds of fairness and reasonableness upon which the plaintiffs now seek leave to appeal could have been the subject of a single leave application to this Court, brought within time, in which leave could have been sought at the same time to argue the questions of law that were raised in the District Court. If there was any arguable merit in the grounds raising questions of law, this Court would not have refused leave under s 385 with respect to them. For more abundant caution, at the same time as applying to this Court for leave with respect to both fairness/reasonableness grounds and legal grounds, the plaintiffs could have commenced an appeal as of right to the District Court. They could have accepted a stay of that proceeding until this Court had determined the leave question. If leave had been granted, then all questions could have been heard together and the District Court proceedings could thereafter have been discontinued. If this Court had refused leave on any grounds, the plaintiff could at least have pressed on with their appeal on grounds of law, as of right, in the District Court.
6. Mr Clancy has deposed that the plaintiffs were: advised by counsel that the courts have historically favoured the exhaustion of s 384 legal appeal rights before considering the grant of leave for a new hearing. I can find no basis in the authorities for any such view. No case law support for it has been identified in the argument on the motion. If such advice was received then it was incorrect. To the contrary of the suggestion that a leave applicant under s 385 should first exhaust any other limited avenue of appeal, in Ahern v Aon Risk Services Australia Ltd [2021] NSWCA 166 Meagher JA said this at [48]: The applicants also submit that not having commenced an appeal to the District Court under s 384 would tell against the Supreme Court granting leave to appeal under s 385. The relevance of this submission to the issues before the Court is not wholly apparent. It suffices to note that it must be wrong, at least in relation to issues which could not be the subject of an appeal under s 384 - such as the lawyers' hourly rates allowed by the review panel as fair and reasonable.
7. There was never a need for the plaintiffs to defer their leave application to this Court on fairness/reasonableness grounds simply because the plaintiffs wished to agitate questions of law. Grounds centred upon questions of law are not excluded from the scope of appeals that may be the subject of a grant of leave under s 385.
8. When the plaintiffs' appeal to the District Court was dismissed they sought judicial review of that decision in the Court of Appeal. The application for judicial review was dismissed on 6 August 2021. The plaintiffs sought special leave to appeal to the High Court and that was dismissed with costs on 10 February 2022. None of these further stages of review and appeal provides any satisfactory explanation or justification for the failure of the plaintiffs to bring their leave application to this Court within the statutory time limit. The whole exercise, up to the refusal of special leave in the High Court, represents a choice of the plaintiffs to pursue an avenue of appeal that appeared to them most promising.
9. It is not the case that the appeal to the District Court had the potential to be useful in elucidating the fairness/reasonableness grounds for which leave is sought from this Court. The plaintiffs' argument to that effect is sufficiently answered by the finding in the District Court that the reasons of the panel were sufficient. Meagher JA's reasons for holding that the District Court did not misapply the law in assessing the sufficiency of the panel's reasons included the following: [53] […] What the applicants required from the panel were not, strictly speaking, reasons sufficient to give them a real right of appeal, but reasons sufficient to allow them to decide whether to seek leave to appeal, and the appellate judge to decide whether to grant it. [63] Critically, there is no reason to think that further or more detailed reasons would assist the applicants in seeking leave to appeal under s 385. The panel's reasons identified the considerations it took into account, including the considerable complexity of the Supreme Court proceedings, the fact the applicants were put to proof on every aspect of their claim, and the amount ultimately recovered relative to the amount claimed. It is not suggested that any of those matters was legally irrelevant or that the panel made incorrect findings, or no findings, about them. […]
10. If the plaintiffs should now be granted leave under s 385, their choice to delay their application while they exhausted appeal rights under s 384 in the District Court, Court of Appeal and High Court, will have exposed the first defendant to an additional 2 years and 7 months of litigation over this assessment, with finality still not achieved and another round just beginning. That would be an intolerable imposition on the first defendant and an unacceptable consumption of the resources of the Courts, unless a strongly arguable case for leave can be demonstrated.

Principles upon which leave may be granted under s 385(3)

1. In Chapmans Ltd v Yandell [1999] NSWCA 361 the Court of Appeal considered an application for extension of time under s 208M of the Legal Profession Act 1987 (NSW). That section was the predecessor to s 385 of the Legal Profession Act 2004 and it made substantially the same provision, permitting an appeal from a decision of a costs assessor to this Court by leave, such appeal to be "by way of a rehearing" if leave should be granted. The assessment in that case was of a bill rendered to a client. The client had contested before the assessor the question of whether he had entered into a costs agreement with the solicitor. The client sought leave to appeal the costs assessment. At first instance a Master had refused to read an affidavit of the client concerning whether or not a costs agreement had been made. The Court of Appeal said that the affidavit should have been read and redetermined the application for leave under s 208M but declined to grant leave.
2. Fitzgerald JA (with whom Mason P and Davies AJA agreed) said this (emphasis added): [8] There is no doubt that the appellant had ample opportunities to place all material and submissions which it desired before the cost assessor. There is still no explanation concerning why the contents of [the] affidavit were not deposed to […] earlier and placed before the costs assessor. [9] […] It was appropriate for [the Master] to take into account that, if leave to appeal was granted, the appeal would be a complete re-hearing de novo, that is a complete re-hearing at which it would be open to the appellant to adduce further evidence including that contained in [the] affidavit. [10] Given the nature of the appeal under s208M of the Act, I am satisfied that a master to whom an application for leave to appeal is made under that section should consider any material evidence which bears upon whether or not leave to appeal should be granted, including evidence which bears upon the likely outcome of the appeal if leave is granted: see Public Service Association of South Australia v Federation Clerks' Union of Australia, South Australian Branch (1991) 173 CLR 132. [11] On the other hand, it is important to keep in mind the purpose of a requirement of leave to appeal. It is intended to act as a filter to ensure that unsuitable appellant proceedings […] are not able to be brought with the demands which that places upon the resources of the Court and the burden which it places upon other parties and the delays which it causes to other litigants. See for example Coulter v Regina (1988) 166 CLR 350 at 359. [12] It is also in my opinion important to keep in mind that s208M must be considered in the context of s208L [equivalent to s 384 of the Legal Profession Act 2004], which restricts an appeal as of right to matters of law. In considering whether or not leave to appeal is granted, it must be decided whether or not, there not being a matter of law arising in the proceeding and there being an appeal as of right only as to a matter of law, there is some other matter which in justice requires that leave to appeal be granted to allow that matter to be relitigated. The party seeking leave to appeal obviously bears the burden of establishing that justice does require that leave to appeal be granted. Further, the master when considering whether to grant leave to appeal obviously has a very wide discretion: see CDJ v VAJ [1998] HCA 67 per McHugh, Gummow and Callinan, JJ. [13] Because the master did not consider [the] affidavit in deciding whether to grant the appellant leave to appeal under s208M, it falls for this Court to re-exercise the discretion which the master was called upon to exercise, that is the discretion whether or not to grant leave to appeal. In exercising that discretion it is for this Court to take into account [the] affidavit to the extent that it is material, as the master should have done. [14] I am comfortably satisfied that on a proper exercise of the discretion leave to appeal should be refused. The small amount involved [less than $20,000], the course followed by the appellant before the costs assessor, the delay, the absence of any satisfactory explanation concerning why the affidavit now sought to be used was not before the costs assessor, and the less than compelling additional evidence which [the] affidavit seeks to bring forward, in my opinion warrant that conclusion.
3. In Wentworth v Rogers (2006) 66 NSWLR 474; [2006] NSWCA 145 the issues, upon which leave was sought under s 208M of the Legal Profession Act 1987 to appeal from a costs assessor's decision, concerned (i) the indemnity principle, that is, whether a party against whom costs were ordered could be liable to pay if the costs claimant had incurred no liability to pay his legal representatives and (ii) the validity of a contingent fee agreement. Santow JA considered that leave should have been granted by the judge below, noting that it's "scope should not involve an unduly prolonged process". His Honour made the following observations: [65] Although I conclude in the exceptional circumstances of this case that appeal under s208M of the Act should have been allowed, I do not consider that such review should be readily granted, or allowed to become automatic. If it did, the costs assessment process will cease to provide a straightforward, efficient mode of resolving costs disputes, but be trammelled by unnecessary litigation. This review should be carried out so that it deals only with the matters identified, and in an expeditious manner. It must be remembered that considerable delay and cost has already attended the costs orders originally made. Furthermore, any appeal must be pursued by the appellants with all reasonable expedition.
4. In the same case at [194]-[195] Basten JA held that the test applied by the judge below, restricting the grant of leave to appeal to cases where "there is an obvious error on the face of the record and that there will be substantial injustice to the plaintiffs if the determination … is allowed to stand", was "far too inflexible and restrictive". His Honour concluded as follows at [202]: Given the limited ability of the costs assessor to determine disputed issues as to the existence of a contractual arrangement of the kind contended for by the Appellants, the powerful countervailing consideration would have been needed to avoid the conclusion that a grant of leave was the only tenable way to exercise the discretion, as justice required.
5. In Cassegrain v CTK Engineering [2008] NSWSC 457 an application for leave was brought under s 385(3) of the Legal Profession Act 2004 for a proposed appeal on six grounds, of which two raised matters of law for which an appeal as of right was available under s 384. After citing Chapmans Ltd v Yandell and Wentworth v Rogers, White J expressed his approach to the remaining grounds in these terms (emphasis added): [113] Although it was submitted for [the leave applicant] in the statement filed under r 50.12(4) that leave should be given because the questions raised by the grounds of appeal were not purely factual and were not an attempt to ask the Court to "re-exercise purely administrative discretions", I think in substance the remaining grounds of appeal do invite the Court to reconsider the merits of the costs assessor's judgment as to the appropriateness of the rates charged by solicitor and counsel and the appropriateness of the work done. That is not necessarily a bar to the grant of leave. If it appeared from a review of the material before the assessor that there were arguable grounds of error such that justice required a review by the court of the assessor's and the panel's decision on matters of either fact or law, then I would be minded to grant leave.
6. In Gazecki v McCabes Lawyers Pty Ltd the Court of Appeal considered s 89 of the Legal Profession Uniform Act, in which the distinction between appeals as of right on questions of law and appeals, generally, by leave has been removed. If the amount in issue exceeds $100,000, there is an appeal as of right and, pursuant to s 89, it is to be by way of rehearing, with fresh or substituted evidence being received. At [43] Basten JA made the following observations: [43] […] Although the distinction between appeals on matters of law and appeals from the final determination of a costs assessment have been removed, it may, nevertheless, be appropriate to adopt different standards of scrutiny with respect to each. Thus, questions of law are inherently liable to review according to a correctness standard; 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.
7. Those observations appear to be equally applicable to an appeal under s 385 of the Legal Profession Act 2004, which, if leave is granted, is to be by way of a "new hearing". In the present case the grounds of the appeal for which leave is sought are solely concerned with the review panel's assessment of the fairness and reasonableness of the amounts allowed. Basten JA's caution with respect to the degree of scrutiny that this Court would appropriately apply to that assessment has a bearing upon whether the plaintiffs should have leave. It would be futile to permit an appeal that would have negligible prospects of success because the issues would all be matters of evaluation, judged according to panel members' experience and standards of consistency, with which this Court would be extremely reluctant to interfere.
8. To similar effect, in Ahern v Aon Risk Services Australia Ltd Meagher JA made the following observations: [54] Ordinarily, at least, deference to the expertise of costs assessors and the importance of finality will weigh against "appellate" interference with their conclusions on matters of fact. It will, moreover, be very difficult to show that a determination is unreasonable or unjust merely by reference to the total sum assessed as representing fair and reasonable costs. A grant of leave to appeal will be most clearly appropriate where it is possible to identify a consequential arithmetical error, or a conclusion as to the reasonableness of carrying out particular work or incurring a particular cost that is more than arguably wrong in some significant way. Unless a disappointed party can identify and put on evidence relevant to particular conclusions of fact with which it takes issue, it will be in no position to demonstrate sufficiently arguable injustice to warrant a grant of leave. [63] […] If it is more than merely arguable, having regard to the experience of the review panel and to any evidence led on the leave application, that the rates allowed are unreasonably low and that the fair and reasonable rates are significantly higher, there will be a basis (subject, of course, to discretionary factors such as delay) for a grant of leave. If it is not, mere doubt as to the weight placed by the panel on considerations to which it was entitled to have regard would not justify granting leave to appeal and determining fair and reasonable hourly rates afresh.
9. While his Honour's observations at [63] were directed to the issue of hourly rates, they are equally applicable, in principle, to the other two matters for which the plaintiffs now seek leave to appeal.

Lack of substance in the s 385 leave application in this case

Ground 1(i) - panel's item-by-item re-assessment

1. The plaintiffs' prospects of obtaining leave for their contention that the panel should not have undertaken a full item-by-item re-assessment is extremely weak. The cross applications for review of the original assessor's determination involved wide-ranging issues, upon which both parties asserted that the panel should substitute its own assessment. For the plaintiffs to succeed on their proposed appeal ground that the full re-assessment should be done again, by a method other than item-by-item scrutiny of the bill, this Court would first have to know what alternative method might be employed. The plaintiffs' submissions leave me at a loss as to what that might be. It is difficult to conceive of a methodology that would be more fair and reasonable than item-by-item assessment carried out by two experienced assessors working cooperatively as a panel.
2. Secondly, the re-assessment would actually have to be carried out by this Court, at least to the level of reasonable estimation, in order to understand the order of magnitude of the difference that might result. The Court would have to know this in order to decide whether it should redetermine the assessment itself, or remit the matter to the panel, or reject the ground of appeal. Given the breadth and lack of specifics in this ground, the plaintiffs are unable to identify what sum may be in issue pursuant to it.
3. If leave were granted for ground 1(i) it would involve the Court in an unconfined assessment of the whole 700 page bill in order to ascertain whether the item-by-item re-assessment by the panel led to an overall result that was unfairly and unreasonably low as a proportion of the plaintiffs' total claim. It is highly likely that leave would be refused for that ground, on the basis that it would be contrary to the scheme of the assessment process laid out in the Legal Profession Act 2004 as interpreted in the authorities cited above. Meagher JA referred to important pre-suppositions of that scheme in Ahern v Aon Risk Services Australia Ltd at [52], as follows: [52] However, the appeal is not, or at least need not be, a de novo review of the entire determination and all of the matters raised thereby […]. Sub-s (5) [of s 385] presumes that there will be "questions" that are "the subject of the appeal" and provides that "[a]fter deciding" those questions (afresh) the appellate court may make the determination which it considers should have been made by the assessor or review panel. That is only consistent with the position being that the leave to appeal sought or granted may be restricted to particular questions of fact, or mixed questions of fact and law, with the other conclusions of the assessor or review panel left undisturbed and taken for granted in the redetermination by the appellate court or tribunal. The possibility of a confined merits appeal is consistent with the requirement in ss 370 and 380 that reasons be given, which permits the identification of discrete questions, and the relative expertise of costs assessors: it cannot realistically be expected that judges will be in as good a position as an assessor to determine the entirety of an application.
4. It is highly unlikely that the Court would grant leave in respect of a ground for which the amount in issue is presently unknowable and that would require the Court substantially to undertake a re-assessment, by a methodology different from that followed by the panel but so far undefined by the plaintiffs. In reaching this conclusion I have had regard to paragraphs 1-7 of the supplementary grounds, as referred to at [38] above. Paragraphs 1 and 2 complain that the parties were not invited to make submissions about whether the panel should undertake a complete reassessment. On the final hearing of the leave application this Court could give accord credence to that argument, given the breadth of the review grounds that were brought before the panel and the fact that the parties could hardly have been shown greater procedural fairness than by having the whole bill reassessed item-by-item on the materials they had chosen to place before the panel. Paragraphs 3-7 contain repetitive assertions, in a variety of verbal formulae, that the panel erroneously assessed on the basis of proportionality of costs to the sum for which the principal proceeding was settled. The lack of merit in this argument is addressed at [69] below.

Ground 1(ii) - inadequate hourly rates

1. The plaintiffs' written submissions opposing the first defendant's notice of motion were prepared and signed by Mr Clancy. In relation to the proposed appeal ground concerning hourly rates, those submissions refer only to the hourly rate that was allowed in respect of himself. The submissions contain the following: [85] [The] hourly rate can readily be shown to be unfairly determined and unfairly low even based on the Panel's own findings and the CARC Range relied upon by the Panel. There is also case law which supports [the plaintiffs'] hourly rates claimed. [The plaintiffs also propose] to bring evidence on the leave application from two costs consultants as to $460 ph being outside the range of hourly rates for this matter and being the rate payable for a routine Local Court matter and not a complex Supreme Court proceedings as here. […] [93] [… The assessors] found that the partner hourly rate should be at the very bottom of the CARC range , which for all courts from the Local Court to the Supreme Court […] was $450-$750. The panel only allowed $460 per hour when [the plaintiffs] had been charged and paid the partner's rate of $550 ph, which rate was already at the lower end of the CARC Range. The rate of $460 was manifestly and self-evidently below the reasonable range for the work performed […].
2. The "case law" cited in footnotes to those submissions consists of one decision of a District Court judge and one decision of Black J sitting in the Equity Division of this Court. The fairness and reasonableness of professional rates is a matter for evaluation on the infinitely variable combinations of circumstances that occur from case to case. The evaluation is not capable of influence by precedent. The proposed evidence of two costs consultants might address the range within which solicitors commonly charge hourly fees but that range is already known, as published by the CARC, and it is not in dispute. The purpose of adducing evidence from costs consultants could only be to introduce their expert opinions as to the appropriate hourly rate for Mr Clancy 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.
3. It is most unlikely that the Court would grant leave to appeal on ground 1(ii) where the plaintiffs' only particularised argument for overturning the hourly rates adopted by the panel comes down to reliance upon opinion evidence of costs consultants. Apart from that argument, the position is that all three experienced costs assessors who have looked at the nature of work done in the original proceedings, the hours claimed, the experience of the professionals engaged and all other relevant criteria, have adopted the same hourly rates. The unpromising nature of this ground is borne out by Meagher JA's further observations in Ahern v Aon Risk Services Australia Ltd at [62], as follows: The exercise of selecting fair and reasonable rates is necessarily partly intuitive. It involves the synthesis of a variety of considerations having regard to the experience of the assessor as "an Australian legal practitioner of at least 5 years' standing" (Legal Profession Act 2004, sch 5 cl 1) and any material (including the CARC guidelines) indicating the rates which could fairly and reasonably have been charged by lawyers of varying degrees of experience at the relevant times.
4. The plaintiffs' written submissions on this ground at par 98 contain the following: The assessment [of hourly rates] by reference to the value of the settlement sum only involves hindsight and was contrary to what the Panel itself considered just unfair. It was inherently unfair and unjust to [the plaintiffs]. The proposition that that the panel had regard only to proportionality between the costs claimed and the settlement amount, rather than considering the more than $3 million claimed in the principal proceedings, is repeated many times throughout the plaintiffs' submissions. It is manifestly incorrect, as can be seen in the reasons of the assessor (quoted at [27] above) and of the panel (at [29] above). The plaintiffs' reliance upon this false premise is a further reason why their application for leave to appeal on ground 1(ii) is highly unlikely to succeed.
5. Paragraphs 8-11 of the supplementary "grounds" in the summons are, in substance, not grounds at all but repetitious arguments on the subject of ground 1(ii), along the same lines as the arguments considered above.

Ground 1(iii) - costs of the costs assessment

1. Quantification of the plaintiffs' reasonable costs of the assessment process is quintessentially a task that the panel members would be in a far stronger position to undertake than a judge of this Division. Not only do the panel members bring to bear their experience of the type of work that is involved in costs assessing and the rates and totals of fees that are typically and reasonably charged for it; they also have intimate knowledge of what has actually been done in the particular assessment at hand and whether the hours and disbursements claimed for the assessment process have been reasonably and usefully directed or, on the other hand, whether the effort has in part been a wasted pursuit of unsustainable claims.
2. At face value, the amounts claimed by the plaintiffs as the costs of the assessment seem very high. The amounts are referred to at [30] and [31] above and come to a total of over $211,000 inclusive of GST. That represents nearly 18% of the amount at which the bill was ultimately certified, being $1,178,551. The claim for the costs of the costs assessment included $66,421.43 of the professional time of Mr Clancy, the partner. As a matter of impression it is not surprising that the panel should have very significantly reduced the amount allowed. Most of the work involved in preparing the bill would have been directed to quantifying the professional costs of the substantive proceedings, which were ultimately allowed at only $672,000. It may be inferred that very little of the work would be directed towards establishing the claimable disbursements, where the task would essentially be one of collating and presenting invoices from third parties.
3. This ground would only be upheld, with the result that the Court would itself reassess this component or remit it to the panel, if the Court could be satisfied that the amount allowed was unreasonably insufficient. The plaintiffs' submissions do not identify any specific basis upon which this ground should be upheld if leave were granted. At par 10 they do no more than refer to the fact that the amount allowed for the costs of the assessment was less than one third the amount claimed and that the amount disallowed was $139,110. The recitation these figures is merely rhetorical. Unfairness or unreasonableness in the result is not self-evident.
4. The reasons of the panel extracted at [33] above show that they took a global approach to quantifying the costs of the assessment, using two alternative methodologies as a check on each other. Meagher JA summarised the panel's approach at [68]-[69], in these terms: [68] [… The] panel had regard to the fact that "some" of the work relating to the costs assessment process "was not done in a reasonable manner". But an amount of $66,000 was substituted for all of the relevant fee items and disbursements. […] That amount was "global" in the sense that it was intended to reflect, without particularisation or reference to the items in the bill, the applicants' reasonable costs of the entire costs assessment process. It was arrived at after the panel had considered two methodologies for making a "global" assessment of those costs […]. [69] The first was to adopt 10% of the fees (that is, not disbursements) ultimately allowed by the panel as the applicants' reasonable costs of the Supreme Court proceedings. That amount was $66,133. The alternative approach, which the panel appears to have treated as a sense checking exercise, was to allow "a certain number of hours (200) at a fixed hourly rate ($275), and [to add] another period (10 hours) for supervision at a higher hourly rate ($506)", producing an amount of $65,120.
5. Bearing in mind the superior position of the panel in making the assessment in this respect and taking into account the principles upon which a leave application under s 385 is to be determined, I considered most unlikely that leave would be granted for appeal on ground 1(iii).
6. Paragraphs 12-16 of the supplementary "grounds" in the summons are, again, not additional grounds. They are repetitious arguments or, more accurately, bald assertions, on the subject of ground 1(iii).

Grounds 2 and 3

1. Grounds 2 and 3 for which the plaintiffs seek leave to appeal (see [37] above) do no more than restate the matters that the plaintiffs seek to agitate under grounds 1(i)-(iii).

Conclusion on extension of time

1. I have concluded that the plaintiffs' delay in filing their summons for leave to appeal, being 2 years and 7 months beyond the expiry of the 28 day period fixed under the UCPR, is not satisfactorily explained, excused or justified and has placed the first defendant position where it would suffer considerable prejudice by the prolongation of this dispute if leave to appeal were now to be granted. The plaintiffs' case for a grant of leave is extremely weak. I will therefore refuse the plaintiffs' application for extension of time. Accordingly, in so far as the summons seeks leave to appeal under s 385 of the Legal Profession Act 2004, it has been filed out of time and must be dismissed on that ground.

Conclusion on strike out under r 14.28 or dismissal under 13.4

1. The refusal of an extension of time and the consequent dismissal of the s 385 leave application make it strictly unnecessary to consider whether that application ought to be struck out under r 14.28, on the basis that it is manifestly unsustainable. Despite my view that the application for leave is extremely weak, I would not be disposed to strike it out under r 14.28 because of the very wide discretion that is exercised by the Court upon the final determination of such an application: Chapmans Ltd v Yandell at [12] (Fitzgerald JA), quoted at [54] above. As noted earlier in these reasons, determination of the first defendant's notice of motion does not involve a decision on the s 385 leave question on a final basis.
2. It is also not necessary to determine the first defendant's claim that the summons should be dismissed on the basis of its form. The first defendant submits that the summons is: oppressive and inappropriate, being part pleadings, part submission, and part evidence. Aon submits that the discursive nature of the Summons leads it to be misleading in many respects, and fails to clearly articulate the grounds of appeal such as to enable Aon to clearly understand the case it is to meet.
3. Those criticisms are well-founded. The summons is inappropriately argumentative. It contains pages of irrelevant and heavily loaded descriptions of the first defendant's conduct in relation to the plaintiffs' insurance claim, its conduct of the substantive proceedings, its unwillingness to make offers in settlement of those proceedings, its insistence upon assessment of the costs and numerous other matters that have nothing to do with the limited question of whether leave should be granted to appeal from the panel's decision. However, it would not be warranted to dismiss the summons on this basis. At least 75% of the content of the summons could be dealt with by simply disregarding it. If the summons were not to be dismissed by reason of being out of time, at most some tighter particularisation of the grounds of appeal might be required.

Order 4 - stay of summons pending payment of earlier costs

1. On 18 March 2022 the Court of Appeal made two gross sum cost orders against the plaintiffs, pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW), in the total sum of $83,000: Ahern v Aon Risk Services Australia Ltd (No 2) [2022] NSWCA 39. The orders were for the costs of the plaintiffs' summons in the Court of Appeal by which they sought judicial review of the District Court decision and the costs of the first defendant's motion claiming the gross sum assessment. To date the plaintiffs have not satisfied the Court of Appeal's cost orders.
2. By paragraph 4 of the relief claimed in the first defendant's notice of motion it seeks a stay of proceedings on the plaintiffs' summons until the costs ordered in the Court of Appeal have been paid. The first defendant invokes r 12.10 but in my view that rule is in applicable because it only authorises the Court to stay proceedings that have been commenced "on the same or substantially the same cause of action, or for the same or substantially the same relief, as that on which the former proceedings were commenced". The summons in the Court of Appeal was for judicial review of the District Court decision whereas the summons in this Court is for leave to appeal the decision of the review panel. Rule 12.10 is not engaged.
3. However the first defendant also relies upon s 67 of the Civil Procedure Act, under which the Court has a more general power to stay proceedings. If the summons herein were not to be dismissed on other grounds, as I have determined, I would order that proceedings upon it be stayed until the costs ordered by the Court of Appeal have been paid. The plaintiffs' appeal to the District Court has been shown to have been a wasteful exercise, causing the dispute over the costs of the original substantive proceedings to become unduly protracted and expensive. If the plaintiffs had been granted the indulgence of an extension of time, I would either have made that extension conditional upon payment of the first defendant's costs in the Court of Appeal or stayed the proceedings in this Court until such payment had been made

Order 5 - dismissal of plaintiffs' claim for interest on costs

1. Paragraph 6 of the relief claimed in the plaintiffs' summons is unrelated to their application for leave to appeal from the panel's assessment. It is in the following terms: 6 Interest on costs paid as awarded by the court from the date of the costs order on 15 February 2015 until the date of payment by the first defendant pursuant to s 101(4)-(5) of the Civil Procedure Act 2005.
2. Paragraph 5 of the first defendant's notice of motion seeks an order that this claim for relief be struck out on the ground that it is barred by the release in cl 5 of the settlement deed, reproduced at [16] above. In February 2015 when the settlement was entered into and the costs order in favour of the plaintiffs was made by consent, interest would not automatically run on the amount of costs that might in due course be assessed. At that time s 101 of the Civil Procedure Act contained the following subsections: 101 Interest after judgment (4) The court may order that interest is to be paid on any amount payable under an order for the payment of costs. (5) Interest under subsection (4) is to be calculated, at the prescribed rate or at such other rate as the court may order, as from: (a) the date or dates on which the costs concerned were paid, or (b) such later date as the court may order.
3. The parties did not consent to any order under s 101(4) or (5) as part of their settlement. Interest did not automatically run on the amount of costs awarded. By force of the release in cl 5 of the settlement deed the plaintiffs were barred from subsequently making any application for an order that interest should run on their costs. Clause 6 of the settlement deed did not qualify the release. It did not leave it open to the plaintiffs to seek, at a future time, an order for interest on costs, where no such order was included in the Short Minutes that were said by cl 1 of the deed to be the basis of the settlement.
4. Subsections (4) and (5) of s 101 of the Civil Procedure Act came into force from 24 November 2015 in the following terms: (4) Unless the court orders otherwise, interest is payable on an amount payable under an order for the payment of costs. (5) Interest on an amount payable under an order for the payment of costs is to be calculated, at the prescribed rate or at any other rate that the court orders, as from the date the order was made or any other date that the court orders. By the Act that amended subs (4) and (5) to the above effect, there was inserted Pt 8, cl 21 of the schedule of transitional provisions to the Civil Procedure Act, whereby it was provided that the amendment would not apply to proceedings commenced before 24 November 2015.
5. It follows from the above that the amendment of s 101 has no impact upon the position of the plaintiffs with respect to interest on their costs under consent order 4 made on 15 February 2015. They have no automatic statutory entitlement to interest, nor an order in their favour for interest, nor any right to apply for such an order in the face of the comprehensive release that was a term of the deed of settlement. The plaintiffs' claim for order 6 claimed in the summons must be dismissed pursuant to r 14.28. The claim is patently not maintainable.

Costs of these proceedings

1. It follows from the above conclusions that the whole summons is to be dismissed and the plaintiffs must pay the first defendant's costs of the proceedings, including the notice of motion. I will not accede to the first defendant's submission that its costs should be awarded on the indemnity basis. Up to this stage, apart from the very small issue of the plaintiffs' claim for interest on their costs, the whole matter has been concerned with the plaintiffs seeking an enlargement of time. That application was undoubtedly a very weak one having regard to the length of the delay, the absence of any good reason for the delay and the seemingly negligible prospects of leave to appeal being granted if time were to be extended. However, taking into account the broad discretionary power of the Court on an extension of time application, I do not find it possible to say that the attempt was so obviously doomed that it should not have been made. Indemnity costs therefore do not seem justified.
2. No doubt the first defendant's costs of opposing the extension of time have been much greater than they should have been because of the discursive fashion in which the summons is drawn, the failure of the plaintiffs to apply for an extension when they originally filed and the verbose and repetitive nature of the plaintiffs' written submissions. Another factor tending to increase the first defendant's costs of these proceedings has been the frequency of procedural defaults by the plaintiffs, including failures to appear on dates listed for directions, failures to file evidence and submissions in accordance with directions and failure to regularise and serve the amended summons that the plaintiffs endeavoured to file on 3 May 2022. Those features will lead to a higher amount being assessed for the first defendant's costs than would otherwise have been the case but they do not justify altering the scale of the assessment to the indemnity basis.
3. The first defendant also asks that its costs be assessed by the Court in a gross sum pursuant to s 98(4)(c) of the Civil Procedure Act. This case warrants the exercise of that power in order to protect the first defendant against any further prolongation of the parties' disputation over costs. Although the substantive litigation was resolved in February 2015, the parties have remained locked in litigation, concerning what should have been a mechanical process of quantifying costs, for more than seven further years. For the past three and a half years, since the issue of the review panel's certificate, the ongoing litigation has been generated solely by the plaintiffs, with complete lack of success. The cycle of argument over costs must be brought to an end.
4. In written submissions Mr Clancy stated the following position on behalf the plaintiffs: Ahern opposes Aon's application for Gross Sum costs at the invitation of the Court and says such an application is premature and inappropriate […]. The application is not made "at the invitation of the Court". It is made by par 6 of the first defendant's notice of motion and has been before the Court since that document was filed on 25 October 2021. It is not premature for the Court to consider whether a gross sum should be allowed at the same time as determining the disposition of the notice of motion generally and deciding which party should pay the costs thereof and of the summons, in circumstances where the outcome of the notice of motion includes that the summons is dismissed.
5. Mr Clancy submits that none of the criteria upon which the Court would usually decide to assess costs in a gross sum are present here. Commonly, the power is exercised where the proceedings have been lengthy and/or where the costs respondent may not be able to pay. However, neither of those factors is a necessary condition. As to other considerations that are to be taken into account on this question, Mr Clancy submitted the following: there is no evidence from Aon that assessment will involve delay, significant expense, inconvenience or aggravation.
6. To the contrary of that submission, I find that the history of the costs dispute between these parties foretells the future. From past events I infer that substantial delay, expense and aggravation for the parties and a further drain upon the resources of the Court would almost certainly follow if the first defendant's costs of the present proceedings were left to assessment. The plaintiffs' submissions on this issue, of themselves, signal a warning that a costs assessment would likely be burdened by the debris of many past battles lost, still being carried forward by Mr Clancy. The following are some examples: […] Aon's opportunistic and cynical attempt to take advantage of its competency challenge to have its competency motion listed and then withdrawing the competency motion and proceeding with the balance of the motion which amounted to its leave arguments […] Ahern is the victim of a ridiculous thoughtless redrafting of the [Legal Profession Act] shortly prior to his case which prevented him bringing his s 384 appeal to the Supreme Court together with a s 385 appeal. Aon's costs claimed [in the present proceedings] appear to be gouging and trying to punish Ahern who is simply seeking to pursue his statutory appeal rights in a bifurcated appeal procedure which procedure has now been rectified in the replacement [Legal Profession Uniform Law] Act.
7. As to the last point, Mr Clancy's repeated reference, throughout the submissions, to the plaintiffs pursuing "statutory appeal rights" pays no heed to the circumstance that this proceeding has first and foremost been concerned with whether an extension would be granted for the filing of the summons long out of time. Mr Clancy's submissions were accompanied by extensive copies of email correspondence concerning interlocutory steps in the present matter, which appear to have no relevance other than to reveal needless dispute over procedural trivia.
8. Ms Scott has deposed that the first defendant has incurred the following expenses of the proceedings, exclusive of GST: Solicitors' professional costs $57,235.50 Counsel's fees $26,958.42 Filing fees, court book printing, sundry $2,409.74 Subtotal $86,582.66
9. Separately in relation to supporting claim in par 6 of the notice of motion for a gross sum assessment, Ms Scott has deposed to the following amounts: Solicitors' professional costs $2,125 Counsel's fees $1,000 Subtotal $3,125
10. Apart from a negligible proportion, the solicitors professional costs have been charged to the first defendant at partner's rates of $425 per hour. Based on my experience of rates in other cases that have come before me and the $460 per hour that was allowed by the assessor and review panel for the plaintiffs' costs of the substantive proceedings, incurred 7-8 years ago, and taking into account the nature of the work required to defend the plaintiffs' summons in this case, I consider the hourly rate of $425 reasonable. I have reviewed the itemised bills rendered to the first defendant by their solicitors. Without attempting a line by line scrutiny I have satisfied myself that the work carried out and charged for is broadly what one would expect.
11. Counsel's fees have nearly all been rendered at the rate of $4,000 per hearing day and $500 per hour. Again, I am satisfied that those rates are reasonable. The total amount of counsel's fees for the proceedings represents about six days work. There was one full hearing day. I have considered the long history of the proceedings; the five separate stages in which the costs of the original litigation have been assessed, reviewed and appealed; the voluminous written submissions and the many items of correspondence that have been exchanged. I am satisfied that six days of counsel's time would have been absorbed in the matter.
12. Ms Scott has deposed that in her experience the amount awarded on a party/party basis is usually approximately 80% the amount claimed and may be up to 100%. From my own experience of evidence concerning the outcomes of assessments, it is common that disbursements, including counsel's fees, are allowed in full and that an award of 80% overall often reflects that a lesser proportion of solicitors' professional costs has been allowed. In the present case, as the costs and disbursements of the claim under par 6 of the notice of motion for a gross sum assessment concern a very confined range of work, I am able to be satisfied that it is reasonable to allow the whole amount of $3,125. In relation to the costs of the proceedings more generally, I would allow the whole of the disbursements but I must apply a significant discount to the solicitors' professional costs, both to allow for the amount that might reasonably be expected to be taken off at assessment and to recognise the inherent crudity of the gross sum estimation process, which is necessarily undertaken at a broad and impressionistic level. For those reasons I would allow 70% of the solicitors' professional costs of the proceedings.
13. The figures that result from this approach are as follows, exclusive of GST: 70% solicitors' professional costs of proceedings $40,064.85 All disbursements of proceedings $29,368.16 Costs and counsel's fees of gross sum application $3,125.00 Total excl GST $72,547.11 GST $7,244.71 $79,791.82
14. As the whole exercise is one of broad estimation it is appropriate to add a rounding amount of $208.18. Accordingly, I assess the first defendant's costs of the proceedings in the gross sum of $80,000. For more abundant caution and notwithstanding that this may involve some duplication of the effect of s 101 of the Civil Procedure Act, I will order that the costs are to be paid within 28 days of the date of these orders and shall bear interest at the rate prescribed for interest on judgments thereafter until paid.

Orders

1. The following orders will be entered: 1. Leave is granted retrospectively for the filing of the amended summons that was lodged by the plaintiffs with the registry on 3 May 2022 and that amended summons shall be treated as having been filed with effect from that date. 2. The amended summons is dismissed. 3. The plaintiffs are to pay the first defendant's costs of the proceedings including its notice of motion filed 25 October 2021 in the gross sum of $80,000 assessed pursuant to s 98(4)(c) of the Civil Procedure Act 2005. 4. The costs awarded under order (3) are to be paid within 28 days of the making of that order and any part of the costs that is unpaid by that time shall bear interest thereafter at the rate prescribed for interest on judgements, until paid.

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: 30 May 2022