Altaranesi v Sydney Local Health District [2012] NSWDC 90 | Case summary

Judgment 1The plaintiff seeks leave to appeal to the District Court from an assessment of party/party costs, issued on 2 February 2011, in the sum of $3,640, the costs the plaintiff was ordered to pay in proceedings in the New South Wales Court of Appeal: Altaranesi v Industrial Relations Commission [2011] NSWCA 278. The Summons filed on 22 March 2012 identifies the relief sought as being pursuant to s 385 Legal Profession Act 2004 (NSW) ("the Act").

The legislation 12 Section 384 of the Act provides as follows: "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." 13Section 385 provides as follows: "385 Appeal against decision of costs assessor by leave (1) A party to an application for a costs assessment relating to a bill may, in accordance with the rules of the District Court, seek leave of the Court to appeal to the Court against the determination of the application made by a costs assessor. (2) A party to an application for a costs assessment relating to costs payable as a result of an order made by a court or a tribunal may, in accordance with the rules of the court or tribunal, seek leave of the court or tribunal to appeal to the court or tribunal against the determination of the application made by a costs assessor. (3) The District Court or court or tribunal may, in accordance with its rules, grant leave to appeal and may hear and determine the appeal. (4) An appeal is to be by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given. (5) After deciding the questions the subject of the appeal, the District Court or court or tribunal may, unless it affirms the costs assessor's decision, make such determination in relation to the application as, in its opinion, should have been made by the costs assessor." 14Appeals under s 384 are appeals as of right. They are required to be brought in the District Court and are limited to "a matter of law" (s 384(1)). An appeal on grounds other than a matter of law arising in the proceedings is available under s 385, but leave is required. 15From which court, or courts, should that leave be sought? Section 385 falls into two parts. A party wishing to appeal against a costs assessment relating to a solicitor/client bill may, in accordance with the District Court Rules, seek leave of the court to appeal to this court under s 385(1). However, party/party costs fall into a different category. The application for leave must be made to the court which made the costs order; ss 385(1) and (2) are mutually exclusive in this regard. 16The terms of s 385(3) appear to confer upon the District Court at least a concurrent jurisdiction with the court making the party/party costs order. However, a careful reading of s 385(3) in context shows that it is a machinery provision, not a provision granting jurisdiction. 17Counsel for the defendant referred me to McCausland v Surfing Hardware International Holdings Pty Ltd [2010] NSWDC 222 at [18], where Johnstone DCJ stated (at [18]-[26]): "18. This issue arose as long ago as 1999 in a decision of the Supreme Court by Master Malpass, as he then was, in Madden v New South Wales IMC [1999] NSWSC196. In 1999 the Supreme Court had the relevant appellate jurisdiction in respect of costs assessment appeals. That jurisdiction has since been transferred to the District Court, which is why I am determining these questions in the present appeal. In Madden, his Honour was dealing with s 208L and s 208M of the 1987 Legal Profession Act. I am dealing with s 384 and s 385 of the 2004 Legal Profession Act, but the sections directly correspond respectively. His Honour was dealing with costs payable as a result of an order for costs made by the District Court. He said, at [20]: "The defendant contends that this court (the Supreme Court) does not have jurisdiction to entertain the application for leave in this case. It is said that by virtue of subsection (2) (of the equivalent of s 385), the District Court only has the jurisdiction. There may well be considerable force in that argument, however the point was not fully argued and it is unnecessary to further pursue it..." 19. I know of no case where the issue has been directly decided. 20. The issue was referred to in the decision of the Court of Appeal in Frumar v The Owners of Strata Plan 36957 [2006] NSWCA 278. That was also an appeal concerning an order for costs made by the District Court, and the Court of Appeal. His Honour Giles JA said at [17]: "In his appeal the claimant claimed orders in reliance on s 208L (s 384), in the alternative leave and orders in reliance on s 208M (s385)... S 208M(1) was not available to the claimant. He fell within s 208M(2) as a party to the opponent's application flowing from orders for costs made in the District Court and the Court of Appeal. He could appeal by leave to the District Court as to the costs payable as a result of the order in the District Court, and by leave to the Supreme Court as to the costs payable as a result of the order in the Court of Appeal." 21. The issue was again referred to by the Court of Appeal in Wentworth v Rogers, this particular decision being at [2006] NSWCA 145. His Honour Basten JA said at [191]: "If the costs assessor did not have power to make findings in relation to such contractual matters and purported to do so his or her decision might be set aside as demonstrating legal error. In that case it would be futile to remit the matter to the assessor: the dispute must be resolved elsewhere. On the other hand, it may be asked whether, if the costs assessor correctly refused to determine the contractual questions, leave could be granted under s 208M (s 385) and those issues could be raised in the relevant court or tribunal." (emphasis added). His Honour went on to say at [193]: "It would undoubtedly be desirable if a costs assessor had power to refer a question of law to the Supreme Court for determination being the kind of power sometimes conferred on tribunals. On the other hand it may have been thought sufficient that the costs assessor would have an implied power not to continue with the assessment of the application so as to allow the parties to have the contractual issue determined in the Court in which the proceedings arose." (emphasis added). 22. I expressed my view on the issue in Randall Pty Limited v Willoughby City Council 2009 NSWDC 118 at [30]: "In the case of party/party costs there is a further complication in that leave to appeal on grounds other than matters of law arising in the proceedings may only be sought from the Court which made the order for costs: See Frumar v The Owners of Strata Plan 36957 [2006] NSWCA 278. This means that a dissatisfied party may be put to an election whether to appeal to the District Court under s 384 or to another court under s 385..." 23. I see no reason to change the view I expressed in Randall. I believe the intention of the legislature is quite clear: If a party to a costs assessment in respect of party/party costs payable as a result of a court order wishes to appeal from a costs assessor or a review panel in respect of a discrete decision as to a matter of law there lies an appeal as of right under s 384. In all other situations leave is required and the application is required to be brought pursuant to s 385. The application for leave must be made to the court or tribunal that made the costs order and the appeal, if leave is granted, is to be heard in that other court or tribunal.24. I do not agree that s 385(3) is to be read as somehow conferring complementary jurisdiction on the District Court in respect of party/party costs disputes. The reference to the District Court in the subsection is limited to disputes concerning a bill, that is, disputes between client and practitioner or practitioner and practitioner where the liability for costs is contractual and not pursuant to a court order: see s 385(1).25. For those reasons the present appeal is incompetent insofar as any grounds relied upon do not relate to a decision on a matter of law arising in the proceedings.26. Any application for leave to appeal under s 385 by these plaintiffs is required to be made to the Industrial Court of New South Wales in accordance with its rules." 18Although not referred to in McCausland, these principles had been explained by Williams DCJ a year earlier, in Legal Employment Consulting and Training Pty Ltd v Patterson [2009] NSWDC 357 at [7] - [10] as follows: "7. Under s 385 appeals are of two types. Ss (1) relates to an application for a costs assessment relating to a bill. A bill is defined in s 302 as a bill of costs for providing legal services. An appeal under s 385(1) requires the leave of the court. Having regard to s 385(2) and s 350(1) I am satisfied that s 385(1) relates to a bill of costs prepared by a solicitor for a client. 8. Section 385(2) however, applies to a bill of costs that comes about as a result of a court order to pay costs. Both are bills of costs but the appeal rights are quite different in each case and understandably so. Where the costs result from an order of a court or tribunal, a party to the assessment can seek leave to appeal to the court or tribunal that made the costs order. If leave is granted the appeal is by way of a rehearing of the costs application not, I would point out, a re-hearing of the issues giving rise to that original litigation. 9. The costs assessment presently appealed against is one arising out of orders by the Local Court against Legal, or rather its predecessor in title Insight Litigation and Legal Services (Insight). Subject to any supervisory jurisdiction of the Supreme Court, the appeal is one that should be dealt with in the Local Court and the District Court. The District Court has no jurisdiction to deal with such an application, at least at first instance. That position is supported by two decisions of Master Malpass in the Supreme Court: Turner v Pride [1999] NSWSC 850 and Poole v Turner 2004 NSWSC 708. 10.The practical sense behind the different avenues of appeal is that a client's dissatisfaction with a solicitor's bill of costs, now appellable ultimately to the District Court instead of the Supreme Court, is best dealt with at a uniform level now being the District Court, whereas dissatisfaction with bills of costs arising out of court orders are best dealt with by the court that made the order in the first place, because that court is going to be best placed to resolve any contentious issues." 19In Legal Employment Consulting and Training Pty Ltd v Patterson [2010] NSWSC 130 Palmer J referred to this interpretation of s 385 by Williams DCJ (at [6]). The approach taken by Johnson DCJ in McCausland is therefore not a new interpretation of s 385, but one of a series of decisions (see also Pasupati v Okill [2011] NSWSC 1383) where courts have held that applications for leave to appeal under s 385(2) need to be brought before the court which had made the order, and not before the District Court. 20The plaintiff submitted that this interpretation of s 385 was in conflict with advice the Supreme Court provides to litigants about the court to which the appeal should be addressed. He drew my attention to the contents of a Notice to Costs Assessment Parties headed "Frequently Asked Questions" which sets out the following: "1. What options does a party dissatisfied with a cost assessor's determination have to challenge the result? A party dissatisfied with the determination of a costs assessor has two options to challenge the decision. One method is review by a panel, which comprises two experienced costs assessors. The panels review process offers an efficient method to review a costs assessor's determination. The second option is to appeal to the District Court of New South Wales. Section 384 of the Legal Profession Act 2004 (LPA) allows an appeal to the District Court but only on questions of law. The District Court has the power to make such a determination as should, in its opinion, have been made by the costs assessor. Section 385 of the LPA is another provision enabling an appeal to the Court. An appeal under this section is not limited to questions of law, but can only proceed if the Court grants the applicant leave to proceed. Once leave is granted, the hearing proceeds as if it is a "fresh" hearing and is not limited to the issues raised during the assessment." (see http://www.lawlink.nsw.gov.au/lawlink/supreme_court/ll_sc.nsf/pages/SCO_costsassessinfo) 21The plaintiff points out, not unreasonably, that there is no reference in this document to the need to approach the court making the order if the costs order is (and the vast majority of costs orders under assessment are) a party/party costs order. 22The plaintiff also drew my attention to the provisions of s 387, which state that an assessor can be a party to an appeal: "387 Assessor can be party to appeal A costs assessor can be made a party to any appeal against a determination or decision of the costs assessor by the District Court." 23How can it be, the plaintiff submits, that a costs assessor can be made party to any appeal in the District Court under s 384 or s 385(1), but not in cases where there is an application for leave from any other court under s 385(2)? This section appears to assume that all costs appeals are brought in the District Court, and this should include costs appeals brought under s 385(2). 24While I can understand that the plaintiff was confused by the material on the Court website and believed that the District Court was the correct venue, the correct approach to take is that taken by Williams DCJ in Legal Employment Consulting and Training Pty Ltd. The District Court does not have jurisdiction to hear this appeal, as the application for leave must be made to the court which made the costs order, namely the Court of Appeal. 25However, Williams DCJ went on (at [11]) to note the undesirability of limiting his findings to jurisdiction where the parties were ready to argue the matter, and went on to hear and determine the s 385 application. In circumstances such as the present, where the amount of costs is small, and the plaintiff a litigant in person, rather than requiring the plaintiff to bring a fresh application in the Court of Appeal, I suggested to the parties that I should determine all issues, in the procedure adopted by Williams DCJ. Accordingly, I propose not only to consider the plaintiff's alternate application to have his appeal heard as if it had been brought under s 384 of the Act, but also the application for leave to appeal under s 385.

Can the appeal be brought under s 384 of the Act? 26Leaving aside the considerable injustice afforded to the defendant by having to meet a s 384 appeal when it was framed specifically under s 385, the hearing of this appeal under s 384 creates real difficulties in terms of the evidence to be received. In McCausland v Surfing Hardware International Holdings Pty Ltd, Johnstone DCJ notes at [30]-[32] a series of decisions (Madden v New South Wales IMC [1999] NSWSC 196, Johnson v Madden [2000] NSWSC 463 and Wentworth v Rogers (2006) 66 NSWLR 474; [2006] NSWCA 145) concerning the circumstances in which fresh evidence should be received on an appeal where the issues are issues of law. Johnstone DCJ concluded at [47]-[49]: "47. In my view appeals under s 384(1) are strict appeals, where the duty of the Court is to determine whether error has been shown in the decision being appealed and it is not the Court's task "to decide where the truth lies as between competing versions of evidence or whether some further evidence may have lead to a different conclusion": see Fox v Percy [2003] HCA 22 at [32]; see also East West Airlines Limited v Turner [2010] NSWCA 53 at [76]. 48. The proper construction of s 384(1) requires a consideration of the totality of the provisions of ss 384 and 385. In my view, these provisions as a whole create a scheme for appeals in respect of costs assessments and reviews. Section 384(1) provides for a narrow, limited avenue of appeal as of right as to a matter of law decided in the proceedings. It is not concerned with the facts except to the extent that the decision is based on the facts found. It is not the purpose of an appeal under s 384(1) to ascertain whether the facts were wrongly decided, incorrect, inadequate or incomplete. The Court is not concerned with absent facts, undisclosed facts or undiscovered facts. It is not contemplated that the facts upon which the matter of law was decided will be reviewed, complemented, varied or added to. The appeal is concerned with the decision as to the matter of law. If a party wishes to introduce fresh evidence or further evidence the sections provide alternative avenues of appeal: Firstly, leave may be sought from the Court or tribunal which made the costs orders in the case of party/party costs, under s 385(2); or in the case of practitioner/client costs, from the District Court under s 385(1). If on the other hand the party is able to persuade the District Court in an appeal under s 384(1) on the material before the review panel, and the District Court does not affirm the decision of the review panel on the matter of law, two options emerge under s 384(2): the Court can determine the application itself or it may remit the decision on the question of law to the review panel to re-determine the application. But there is in my view a further twist. The Court may not receive further evidence under s 384(3) if it decides to determine the matter itself. If it decides to determine the application itself it must do so on the evidence that was before review panel. It is only the review panel that can receive further or additional evidence under s 384(3) on a re-determination. This twist arises from use of the word determination in s 384(2) and the word re-determination in s 384(3). 49. I do not agree that the reference in s 384(1) to the rules of the District Court (i.e. the UCPR) changes the nature of the appeal contemplated by that subsection. Insertion of the words referring to the rules is to guide the prospective appellant as to the procedure and process for making the appeal. They do not change the limited of nature of the appeal or somehow enlarge the scope of the appeal. Rule 50.16 does not relate to the making of the appeal. It relates to the conduct of the appeal, once made." 27The affidavit of Mr Altaranesi includes material which was not before the costs assessor. It is hard to say how much of the material is fresh evidence. However, the real problem for the plaintiff, whether or not he is permitted to rely upon the material in this affidavit (which I am prepared to do, to avoid further delay), is that despite the grounds of appeal set out in the Summons, the principal ground he raised before the assessor, and before me, is that the charges made by the barrister are too high. Whether or not fresh evidence is required, the plaintiff is asking the court to rehear issues of fact, and not law, in relation to his requests to re-assess the bill and to take into account his financial hardship. 28Three of the appeal grounds raised by the plaintiff do, however, give rise to issues of law. The first is the claim of "actual bias" and the second is the allegation of lack of procedural fairness. I will deal with each of these as follows: (a)Actual bias The basis for this (see page 57 of Mr Altaranesi's letter of 6 February 2011 to Mr Sharpe) is firstly that Mr Sharpe and the counsel whose bill is the subject of the costs assessment have offices in the same building, and that correspondence about the costs assessment had been sent to this barrister instead of the solicitor whose name appeared on the costs assessment application. The plaintiff also complains that the applicant must have answered his letter of objection and that, if so, a copy of that letter had not been sent to him. In addition, an objection was made on the basis that both Mr Sharpe and the barrister whose bill was the subject of the costs assessment were members of the New South Wales Bar Association, which the plaintiff submits is further evidence of bias. The law relating to judicial bias is comprehensively analysed by the Hon Grant Hammond, Judicial Recusal: Principles, Process and Problems (Hart Publishing, 2009). Hammond also notes (at p.32) that the rule for bias for judges must perforce be applied to tribunals and other administrative decision-making processes (citing R v Gough [1993] AC 646 (HL)).At p. 5 the author notes the ease with which litigants perceive bias as follows: "From the point of view of individual litigants, it is almost impossible to persuade a losing party that a judge's prior involvement with the subject matter of the litigation or somebody involved in it did not have at least something to do with his or her decision." However, the "apprehension of bias" test laid down by the High Court of Australia in Ebner v Official Trustee in Bankruptcy (2001) 205 CLR 337 at [6] makes it clear that the test is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the case. The facts relied upon by the plaintiff to establish "actual bias" are tenuous. The principal complaint is that the costs assessor and the barrister have offices in the same building, and are both members of the Bar Association. The bystander at the back of the court (or the doorway of the costs assessor's office) would, however, be aware of the practical realities of litigation in a country with a small population, where many lawyers have offices in the same building or street, for convenience to the court. The other basis for objection - that the costs assessor sent correspondence concerning the barrister's memorandum of fees to the barrister rather than to Ms Whalan at the Sydney Local Health District - is unreasonable. The plaintiff in fact wrote to Ms Whalan refusing to deal with her, and saying he would only deal with the barrister. It was entirely proper for the costs assessor to write to the barrister - his bill constituted the entirety of the costs claimed on assessment. The allegations of bias are fanciful and should be rejected. (b)Lack of procedural fairness The plaintiff complains that the costs assessor had made an assessment on 12 January, which was before the plaintiff's final comments on the costs were received (page 56 and 57 of the affidavit). However, the letter of 12 January (at page 56) is in fact a letter identifying costs assessor's fees of $577.50. The costs assessor's assessment was issued on 2 February 2012, and sent on 23 February 2012, after receipt of the plaintiff's further comments. At the time this letter of 12 January was sent, both parties had already provided what the costs assessor regarded as "detailed correspondence". The costs assessor sent his bill, but invited further correspondence within 14 days, following which he proposed (in the absence of further submissions) to issue his assessment for the sum indicated ($577.50). Following this letter being received, the plaintiff exercised his entitlement to respond to the application in accordance with the invitation of the assessor dated 12 January 2012. Those submissions were received on 30 January, as is noted in the costs assessment. This ground of lack of procedural fairness is misconceived. Secondly, the plaintiff complains that he was not forwarded any further reply by the costs respondent to the assessor's invitation to the parties for further submissions. However, the costs respondent did not exercise his right of reply, nor was the costs respondent given any right of reply to the further submissions of the plaintiff. The plaintiff's concerns that these documents might exist, and not have been forwarded to him, are without foundation. This ground of lack of procedural fairness is also misconceived. The plaintiff's third ground of complaint was that he did not receive a copy of the costs respondent's reply of 11 January 2011, referred to in paragraph 5 of the assessment. However, according to the costs assessor, the costs applicant provided detailed submissions on 30 January 2012 dealing with the matters raised by the costs respondent. There is no reference in the assessment to any other correspondence being received by the costs respondent. In those circumstances, it would appear that all correspondence forwarded to the costs assessor by the costs respondent was in fact made available to the costs assessor, since the sole correspondence about this comparatively small bill was the costs respondent's letter of 11 January 2011, to which the costs applicant replied in detail. This ground is also misconceived. The plaintiff also invited me to infer that the costs assessor had not read any documents sent to him, given the speed with which he produced his assessment, although the plaintiff had sent him "twelve or thirteen pages" of material. I reject this submission as being evidence of lack of procedural fairness. The plaintiff raised other matters, such as claims that he was not given the barrister's fee agreement, proof of GST entitlement, the failure of the costs assessor to refer to his submissions in his reasons, and refused to permit oral submissions, referring to CSR Ltd v Eddy [2008] 70 NSWLR 725. The fee agreement is identified in paragraph 5(d) of the Application for Assessment (page 27 of the plaintiff's affidavit). The barrister's ABN is on his letterhead. The costs assessor is not obliged to refer to the parties' submissions in his reasons (see Levy v Bergseng [2008] NSWSC 294 at [78] - [81]). The costs assessor was not obliged to permit oral submissions given the size of the costs under consideration and the narrow ambit of issues in dispute. The claim of lack of procedural fairness is not made out. (c)The claim that the bill is "uncertain" The plaintiff explained, in oral submissions, that the reference to "uncertain" meant that he challenged the validity of the barrister's memorandum of fees because, contrary to s 332(2) of the Act, the barrister had not signed his bill. The provisions of s 332(2) do not require barristers to sign their bills for them to be accepted on assessment. The barrister's bill, addressed to the defendant, was sent to the plaintiff under cover of a letter from a Ms Whalan on 6 May 2011, which offered to accept a reduced sum of $2,548. That offer was rejected on 9 May 2011. (The plaintiff also told Ms Whalan that he was not prepared to deal with anyone other than the barrister who had appeared in the Court of Appeal: page 18 of the plaintiff's affidavit). On 23 August 2011, the Department sent to the plaintiff an application for assessment for party/party costs. That application is signed (page 30 of the affidavit of the plaintiff) and this is sufficient to comply with s 332(2).This claim is also not made out. (d)The financial hardship of the plaintiff This is not a matter of law, but I note in any event that plaintiff did not provide me with any particulars concerning his financial hardship, such as lack of assets or employment. In support of this submission the plaintiff did, however, provide a detailed breakdown of the objections to the size of the barrister's fees. The fees are as follows: (a) 1 March 2011 - Read Materials (1 hr 30 minutes) - $450.00 GST (b) 5 April 2011 - Research (2 hrs) - $720.00 GST (c) 6 April 2011 - Mention (1 hr 30 mins) - $450.00 GST (d) 12 April 2011 - Settle Submissions (2 hrs) - $720.00 GST (e) 18 April 2011 - Hearing (1/2 day) - $1,300.00 GST The plaintiff, in support of his submission that this was an error of law, drew my attention to the policy directive of New South Wales Health concerning the engagement of external providers for legal services. He complained firstly that the counsel who appeared was not on the panel. However, an examination of the panel members revealed that these are firms of solicitors. There is no panel for barristers. The policy directive permits the briefing of counsel, both by solicitors and directly by the Department. The Department directly briefed the barrister who appeared. No charge was ever made for their services. This last point is relevant to the next argument. The plaintiff complains that the Department never provided its GST information. However, the only charges covered by the provision of this costs assessment were the fees of counsel, and counsel's ABN number is displayed prominently on his letterhead. The plaintiff also raised a series of objections to the manner in which the bill was structured, such as the provision of an hourly rate for research and drafting and the provision of a daily rate for the appearance in the Court of Appeal on a half-day basis. For example, he stated that he had measured the distance between counsel's chambers and the court, and that it was 230 metres, which would take a few minutes to walk. The plaintiff acknowledged that it had been necessary to remain in the Registrar's callover list until the hearing was called on in the Court of Appeal, but stated that the hearing was short and that Handley JA's judgment (one and a half pages long) was even shorter. He considered a reasonable fee for two hours of work in the Court of Appeal, excluding GST, was $410 or, if inclusive of GST, $600. The costs assessor noted that, in assessing costs, he had regard to "the question of proportionality", not only in terms of the quantum of the costs, but also in terms of the complexity of the matter, the conduct of the parties, the importance of the proceedings to the parties and the orders eventually made by the court (paragraph 7(iv) of the assessment). The plaintiff raised similar objections to each of the amounts claimed by counsel in his memorandum of fees. In each case, I consider that the costs assessor's determination not only is not capable of being the subject of any error of law, but also is both fair and reasonable. 29This brings me to the issue of the merits of the appeal under s 385.

(2001) 205 CLR 337

(2006) 66 NSWLR 474

(1988) 166 CLR 350

[2003] HCA 22