Forensic accountants' costs
22Mr Aktas contends that leave to appeal is warranted in respect of the Review Panel's treatment of three matters. The first matter was some disallowed costs of two firms of forensic accountants, Profin Consulting and T.A. Khoury. The second matter was some solicitor's costs referable to dealing with those accountants. They can be dealt with together.
23During the course of costs assessment, there was a considerable debate about the position of Homewise given that it owed costs to Westpac and had been de-registered.
24In particular, Westpac contended that there should be applied the so-called "rule of thumb" explained by Young J at 7 in Longreach Oil Ltd v Southern Cross Exploration NL (Supreme Court of New South Wales, 9 March 1988, unreported) to the effect that:
"... in the absence of material being put before the court to show that some other liability was assumed by the persons who severally retained the solicitor, that each pays or is entitled to an equal amount of costs ..."
25For reasons that are unnecessary to describe, the Review Panel decided not to adopt that approach. Instead, it advised the parties the approach it would adopt, as follows:
"Accordingly in the Panel's view, Mr Aktas is able to recover all of the common costs paid by him and all of the unpaid common costs as well as all of the costs that are specific to his claim. However, he is not, on a party/party basis, entitled to recover costs that are unique to Homewise's claims.
Nor is in our view Mr Aktas able to recover costs that were already paid by Homewise. Homewise is deregistered and has no ability to seek a contribution from Mr Aktas."
26The Panel disallowed the costs of the two sets of forensic accountants that I have referred to, stating as follows:
"The Panel disallowed the fees claimed by Profin on the basis that these were probably paid by Homewise. Further, the fees more likely relate to the breach of contract claim by Homewise. The Panel perused the submissions made on behalf of [Mr Aktas] and the judgments referred to above, particularly the judgment by Fullerton J. Mr Hilton of Profin gave evidence in relation to damages suffered by Homewise. There is no reference to his evidence in relation to the defamation part of the judgment involving [Mr Aktas]. In any event the damages awarded to [Mr Aktas] were not assessed by reference to any losses suffered by Homewise. The submissions also do not appear to submit that [Mr Aktas'] damages should be based on loss of profits of Homewise. Whilst there is no doubt that [Mr Aktas] would be adversely affected by the loss of profits by Homewise, his loss is not independent of Homewise and to the extent that Homewise was awarded damages for such losses his loss was thus also compensated.
T A Khoury & Co's work also related directly [to] the claim by Homewise for loss of profits and thus the same considerations apply."
27The fees claimed by Profin referred to in this extract were $80,370.50. The fees payable to T.A. Khoury & Co that were disallowed amounted to $28,138. Mr Aktas has also estimated that $5,676 in solicitor's costs referable to dealing with these accountants was disallowed by the Review Panel. Hence, the amount in issue on this matter is in excess of $110,000.
28Counsel for Mr Aktas, Mr J.F. Heazlewood, submits that the reasons of the Panel set out in the above extract contain an important factual error and are otherwise erroneous, or at least arguably so. He submits that those matters, in combination with the amount in issue, warrant the grant of leave to appeal.
29The allegedly erroneous factual conclusion is the finding that the fees claimed by Profin "were probably paid by Homewise". Before the Review Panel was Profin's invoice dated 27 July 2011. This post-dated Homewise's de-registration. The invoice indicates that $8,000 had been paid, but $72,387.50 was still outstanding. To supplement this, material was placed before the Court to confirm that the balance of this account has still not been paid. Thus, there is a strong basis for contending that there was a factual error on the part of the Panel.
30Counsel for Westpac, Ms K. Dawson, contended that there was no evidence as to whether there had been payment of the balance of the amounts in issue on this topic, and that it was clearly open to Mr Aktas to bring forward evidence in that regard. This is true, but the Panel's reasons only assert the Profin's fees were probably paid by Homewise. If this matter were the only basis for the Panel's rejection of these costs, then there would be a strong case for a grant of leave to appeal, at least so far as Profin's fees were concerned and leaving aside any argument as to whether this matter could have raised a no evidence ground and, thus, been the subject of an appeal under s 384.
31However, the substance of the Review Panel's reasons for rejecting the accountants' fees is the balance of the extract set out above (at [26]). In this Court, there was a substantial argument over whether the material obtained from the accountants concerning particular items of financial loss suffered by Homewise was relevant to Mr Aktas' claim that he suffered damage as a result of a defamatory publication. Both counsel took the Court to various passages from the judgment in Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225.
32Prior to the Panel's decision, the solicitor for Mr Aktas provided a submission contending that the accountants' fees were not unique to Homewise's claims but were also relevant to Mr Aktas' claims. He cited the decision in Andrews. One aspect of Mr Aktas' complaint is that he says the Panel ignored his solicitor's submission. I do not accept that contention. To the contrary, the Review Panel expressly addressed the solicitor's submission. It did so by reviewing the various judgments, especially that of Fullerton J at first instance. It concluded that, irrespective of whether Mr Aktas could have relied on the material from the accountants, there was nothing to indicate that he had in fact sought to rely on it, nor was there anything in the judgments to indicate that the Courts had taken it into account in assessing his damages. Thus, whatever be the theoretical position that was open to Mr Aktas in terms of relying upon the accountants' material, the Panel concluded that the "fees more likely relate to the breach of contract claim by Homewise".
33Mr Heazlewood took me to one part of Fullerton J's judgment. However, even the passage to which I was referred does not contradict the Panel's assessment of that judgment or the Court of Appeal's judgment. Mr Heazlewood conceded that there was no material placed before the Panel to suggest that Mr Aktas had in fact relied on the accountants' reports as part of his case. However, there was read on the application for leave an affidavit from junior counsel who had appeared for Mr Aktas at the trial before Fullerton J. Annexed to his affidavit were extracts from two sets of written submissions handed up to her Honour. In the first set of submissions and under the heading "Damages" there is a reference to the decision in Andrews. However, that reference is only made in the context of Homewise's claim. The only matter stated concerning Mr Aktas' damages in those submissions is that they "must be sufficient to indicate the harm to his reputation and to compensate him for the substantial hurt to feelings that he has suffered". No attempt was made in those written submissions to cross-refer any aspect of his claim for damages to what might be said to be revealed by the accountants' evidence. Thus this submission is completely consistent with the Panel's analysis that I have extracted above.
34The other submission annexed to the barrister's affidavit is not so clear. It includes the following:
"The cheque dishonours had an immediate impact in and about the real estate agency premises. Many cheque recipients attended and acted aggressively. This had an immediate impact on the staff - a fair majority of whom were cheque recipients themselves. They started to leave. They started looking elsewhere. They were loosened by this event. In turn they start questioning management: see T228 to 244. Other real estate agents start using the defamation too. For example, Mustafa Dalgic. The agency is weakened. This in turn has cross-impacts. The impact on the reputation of Aktas and the company increases - the bank has admitted that that Mr Aktas is the alter ego of the company."
35It seems to me at least arguable that the reference to "cross-impacts" in this passage was an attempt to argue that Homewise's worsening financial position impacted on Mr Aktas' reputation. Nevertheless, it is noteworthy that there is no reference in this submission to the accountants' evidence. Instead, there is a reference to the evidence of other witnesses concerning the events that were transpiring at the real estate agency.
36The judgment of Fullerton J reveals that the accountants' reports addressed the quantification of the lost rental income and sales income of the real estate agency business. There is nothing in the above submission which attempts to tie the quantification of that loss to any question as to the loss of reputation on the part of Mr Aktas.
37Ultimately, I am left in a position where the assessment of the Panel was clearly correct on the material that was before it. The only matter put against it is an unclear submission that does not directly refer to the accountants' evidence. The relevance, if any, of the accounting material to Mr Aktas' claim for damages was clearly not of such significance that it was considered by Fullerton J. There was no complaint about any failure on her Honour's part to refer to that material when the matter went on appeal.
38As I have said, the Panel's decision was correct on the material before it. The material said to cast doubt upon it is not particularly cogent, and there is otherwise no explanation why that material was not placed before the Panel. In those circumstances, I do not consider that the interests of justice justify a grant of leave to appeal concerning this matter.