This is an application, by amended summons filed 17 March 2022, to review a decision of the Manager, Costs Assessment, dated 3 December 2021, to refuse the plaintiff an extension of time in which to challenge a decision of a costs assessor dated 9 December 2020.
Shortly stated, but explained in more detail later in these reasons, the matter concerns a dispute over legal fees between the plaintiff and his former solicitor arising out of an unsuccessful appeal to the High Court.
The plaintiff's essential contention is that in early 2019, he agreed to pursue an appeal to the High Court conditional upon his legal costs being capped at $100,000 - an amount that he was required, by his lawyers, to secure by mortgage over his home. As it happens, he was rendered a bill for the legal costs incurred by his legal representatives in the amount of $391,555.44 incl GST, and of that amount one junior counsel rendered fees in the amount of $301,636.72 incl GST.
To cut a long story short, the legal costs were assessed. The costs assessor disagreed with the plaintiff's argument that the costs were capped. All up, the defendant's costs were assessed at $372,674.84. The plaintiff, being dissatisfied with that conclusion should have sought a review at that time, but he did not. The defendant, content with it, registered the costs certificate in the District Court, obtained a judgment for the assessed costs and arranged for the issue of a bankruptcy notice, which was duly served on the plaintiff.
Being served with a bankruptcy notice, the plaintiff moved to set it aside: he filed an application in the Federal Circuit and Family Court of Australia seeking such an order. Some few months after doing so, but before the hearing of that application, the plaintiff filed an application for a review of the costs assessor's decision.
The Manager, Costs Assessment, refused the plaintiff an extension of time and did so, notwithstanding that the application to set aside the bankruptcy notice was listed for hearing in 11 days' time. As it happens, albeit some months later, a judge of the Federal Circuit and Family Court of Australia agreed with the plaintiff's characterisation of the costs arrangement - viz., that his costs were capped at $100,000, and the bankruptcy notice was set aside.
The position that has been reached, therefore, is this: a costs assessor has determined that the plaintiff has a liability of nearly $400,000 in legal costs whereas a judge has determined that the plaintiff's liability is limited to only $100,000.
In my view the interests of justice clearly dictate that an extension of time should be granted, so as to permit the plaintiff to have the costs assessment reviewed by a review panel. These are my reasons for that conclusion, and for making an order giving effect to it.
[3]
Background
Having sketched that introduction and overview, I will now set out the background facts in some more detail. Most of them are uncontroversial. In what follows, I have grouped them into four parts. The first part sets out the statutory provisions relating to the assessment of legal costs. The second part sets out the procedural history. The third part identifies the key findings made by the Manager, Costs Assessment, for refusing the extension of time that the plaintiff sought. The fourth part sets out the key findings and conclusions from the decision of the Federal Circuit and Family Court of Australia in connection with the plaintiff's application to set aside the bankruptcy notice founded upon a judgment entered following registration of the Certificate of Determination of Costs ('the costs certificate') issued by the costs assessor.
[4]
Costs assessment: the (relevant) statutory provisions
It is necessary to make some reference to the statutory framework dealing with the assessment of legal costs. There was no issue between the parties about them.
Part 4.3, Division 7 of the Legal Profession Uniform Law (NSW) ('the LPUL') applies to "legal costs payable on a solicitor-client basis": s 196 of the LPUL.
An application "for an assessment of the whole or any part of legal costs payable to a law practice may be made by…the law practice": s 198(1)(c) of the LPUL.
Assessment of legal costs is to be conducted by a costs assessor, and the assessment is to be conducted in accordance with Part 4.3 of the LPUL: s 199(1) of the LPUL. When undertaking that assessment, the costs assessor must "determine whether or not a valid costs agreement exists" and "determine whether legal costs are fair and reasonable": ss 199(2)(a) and (b) of the LPUL.
Once the costs assessor has determined the costs, the costs assessor "is to issue a certificate that sets out the determined costs": s 71(2) of the Legal Profession Uniform Law Application Act 2014 (NSW) ('LPULA Act'). A certificate issued under s 71(2) is "on the filing of the certificate in the… Registry of a court having jurisdiction to order the payment of that amount of money, and with no further action, taken to be a judgment of that court against the party to the assessment by whom the costs are payable in favour of" (relevantly here) the defendant: s 71(3)(a) of the LPULA Act.
Following this determination and the certificate that issued, the plaintiff was entitled to apply for a review of that determination "within 30 days after the certificate of determination by the costs assessor has been forwarded to the parties in accordance with the regulations or the costs assessment rules": s 83(1) of the LPULA Act. The review is conducted by a review panel: s 85 of the LPULA Act. The Manager, Costs Assessment "may extend the period for lodging an application" for a review: s 83(1A) of the LPULA Act.
The Manager, Costs Assessment is a registrar appointed to the position by the Chief Justice: s 93B(1) of the LPULA Act. By s 93B(3) of the LPULA Act, the "acts and decisions of the Manager, Costs Assessment are reviewable by the Supreme Court in the same manner as acts and decisions of other registrars are reviewable by the Court".
[5]
The procedural history
In the early part of 2019, the plaintiff retained the defendant in connection with a High Court appeal. At that time a barrister, Christopher Bevan, was also retained by the solicitor.
Although the parties did not dispute that there was a retainer between the plaintiff and defendant, one key part of the relationship is the subject of significant contest: on the one hand the plaintiff says that he agreed to pursue the High Court appeal, conditional upon his legal costs being capped at $100,000; on the other hand, the defendant says that there was no condition of that kind, and that the plaintiff well knew this. It is not in dispute that, as part of the arrangement, the plaintiff executed a mortgage over the plaintiff's property: the plaintiff says that the annexure to the mortgage confirmed that the plaintiff's legal costs were so capped; on the other hand, the defendant says that the mortgage (which was drafted with the input of the plaintiff, the defendant and the barrister) was provided as a means for securing his legal costs. The mortgage was executed by the plaintiff and defendant in around early March 2019. (The evidence did not include a copy of the registered mortgage, only the one as executed. Nothing turns on this).
On 21 June 2019 the High Court granted the plaintiff special leave to appeal from a decision, and orders, of the Full Federal Court. The High Court heard the appeal on 11 October 2019 however, on 13 December 2019, dismissed it.
On 6 December 2019, the defendant issued an invoice to the plaintiff claiming $391,555.44 incl. GST - which included disbursements of $301,636.72 incl. GST for Mr Bevan's fees.
On 12 December 2019, a sequestration order was made against the plaintiff's estate. The plaintiff appealed to the Full Federal Court (the date the appeal was heard, and the reasons for judgment are not in evidence - but nothing turns on this). On 26 May 2021 that Court upheld the appeal and set aside the sequestration order.
The defendant applied, on 15 October 2020, to have the costs, claimed in his invoice dated 6 December 2019, assessed pursuant to s 198(1)(c) of the LPUL.
The assessment of the defendant's bill of costs was referred to a costs assessor who sought, and received, submissions from both parties. The plaintiff raised a number of objections to the costs claimed, including an objection that his legal costs were capped at $100,000. The costs assessor did not accept the plaintiff's argument and assessed the defendant's costs at $358,234.71 - to which interest ($10,524.58) and the costs of a filing fee for the costs assessment ($3,915.55) were added. On 9 December 2020, the costs certificate, in the amount of $372,674.84, was issued by the costs assessor.
On 12 May 2021, the costs certificate was emailed to the plaintiff. The plaintiff had, from this time, 30 days in which to lodge an application for a review of the costs assessor's decision - that is, until 12 June 2021: s 83(1) of the LPULA Act.
To recap, slightly: as I have earlier noted (see [21], above), on 26 May 2021 the Full Federal Court set aside the sequestration order made against the plaintiff's estate.
On 4 June 2021 the defendant registered the costs certificate in the District Court. Having done so, on 23 June 2021 the defendant applied for a bankruptcy notice to issue based upon this judgment. That bankruptcy notice was served on the plaintiff on 6 September 2021.
By application, filed on 22 September 2021 in the Federal Circuit and Family Court, the plaintiff applied to set aside the bankruptcy notice. That application was listed for hearing before Judge Manousaridis on 14 December 2021. By orders made on 4 February 2022, Judge Manousaridis set aside the bankruptcy notice. Shortly stated, but explained later (see [33]ff, below), Judge Manousaridis upheld the plaintiff's characterisation of the agreement, and that the fees payable pursuant to it were capped at $100,000.
On 23 November 2021, the plaintiff filed an application to review the decision of the costs assessor, and sought an extension of time in which to do so. By reasons dated 3 December 2021, the Manager, Costs Assessment refused to grant the plaintiff the extension of time sought, and advised the plaintiff that the "file will now be closed".
On 24 January 2022, the plaintiff filed a summons in this Court seeking a review of the decision of the Manager, Costs Assessment. The only defendant to that summons was the current defendant. However, in the amended summons filed, the plaintiff named the Manager, Costs Assessment, as the second defendant. There was no need for that to occur in light of the power within r 49.19 of the UCPR. Thus, I will, in what follows, simply refer to the two active parties as the plaintiff and defendant.
A final matter: during the course of final submissions, the defendant sought, and was granted, leave to adduce further evidence. The defendant filed, pursuant to that leave, an affidavit of the defendant sworn 20 September 2022. That affidavit is read, and marked Exhibit 6. The plaintiff, in response to this evidence filed, pursuant to leave granted to him, a further affidavit sworn 28 September 2022. That affidavit is read, and marked Exhibit B.
[6]
The decision of the Manager, Costs Assessment
The ultimate conclusion reached by the Manager, Costs Assessment, was that the plaintiff's grounds of review:
"…can be best described as dissatisfaction with the costs assessor's determination, towards the amount determined as being proportionate and reasonable. When considering an application for additional time, compelling submissions addressing the grounds of review are required. Also, fresh supporting material substantiating the grounds of review.
Having considered the available material, the MCA is not satisfied, that it would be just and fair in the circumstances to grant an extension of time for filing the review application. As dissatisfaction with an outcome; want for a further assessment; or taking an opposing view to the objective assessment undertaken by an assessor, are not sufficient to address or demonstrate merit in support of the delay".
The Manager, Costs Assessment, made a number of findings that informed these conclusions. The key findings were:
1. Depending upon the decision, one party will "experience some form of prejudice", with the defendant experiencing "the greater prejudice" - which was said to be (adopting a submission that was made by the defendant) "demonstrated by the allocated and upcoming hearing date, involving this costs dispute listed in the Federal Court, having to be vacated if an extension was granted. This would leave the parties having to wait a significant period of time for another hearing date suitable to the Court".
Two matters should here be noted. First, it is clear, from an earlier part of the reasons as well as the other evidence, that the reference to the Federal Court was to the hearing seeking to set aside the bankruptcy notice that was listed before Judge Manousaridis on 14 December 2021 in the Federal Circuit and Family Court of Australia. Secondly, the Manager, Costs Assessment, recognised that the very dispute would be subject to judicial determination by that Court - viz., "… involving this costs dispute…".
1. The length of the delay was "significant", being five months between the time at which any application for review was required to be filed, and the time that it was.
2. The plaintiff's bankruptcy came to an end on 26 May 2021 leaving the plaintiff "half the statutory timeframe to seek a review". The plaintiff's explanation for the delay - which included issues or difficulties with him being a bankrupt - did not preclude him from participating in the costs assessment.
3. The application by the plaintiff "can best be described as a generalised objection to the assessor's determination", and it was "difficult to see what merits this review application has or how a review panel could reach a materially different outcome to that of the original costs assessor".
[7]
The decision of the Federal Circuit and Family Court of Australia
The parties gave little attention to the decision of the Federal Circuit and Family Court of Australia setting aside the bankruptcy notice.
Although a number of issues were raised during the hearing in that Court (see J[69]), so far as he is presently relevant, Judge Manousaridis identified a critical one in the following terms (J69):
Is it open to Mr Boensch to rely as a ground for setting aside the bankruptcy notice on the contention that the Judgment Amount does not reflect any debt that he in truth owes to Mr Bingham because, first, the Costs Assessor ignored the Mortgage and, second, the Costs Assessor did not in any event conduct a proper costs determination? If so, does Mr Boensch succeed in his contention?
As I will shortly explain, each of these questions was resolved favourably to the plaintiff. The reasons of Judge Manousaridis are detailed, but it suffices to identify two key findings.
The first, at J[83], is a finding that the costs agreement entered in relation to the High Court matter was the agreement constituted by the mortgage:
The Costs Determination on the basis of which the Costs Certificate was issued was premised on the Cost Assessor's finding that Mr Boensch and Mr Bingham entered into costs agreements on the terms contained in the Solicitor's February and October costs disclosures. The evidence before me, however, not only gives rise to a substantial reason for questioning that finding; it leads me to conclude that Mr Boensch and Mr Bingham did not enter into any such costs agreements, and that the only costs agreement they entered into in relation to the payment of the HC Costs is the agreement constituted by the Mortgage. (Underlining added)
The second, at J[85], is a finding that the mortgage was a costs agreement and that the costs assessor ought to have applied it when assessing the defendant's entitlement to legal costs:
The Judgment Amount, therefore, does not represent any debt that is payable by Mr Boensch to Mr Bingham. In truth Mr Boensch owes no debt to Mr Bingham in relation to the HC Costs; and no legal costs were payable to Mr Bingham at the time he applied for the assessment of his costs. The Costs Assessor, therefore, purported to embark on an assessment of legal costs he had no authority to undertake, and he therefore purported to make a costs determination in relation to the HC Costs he had no jurisdiction to make. The Costs Determination, therefore, is incapable of having any legal effect. Further, given the Mortgage is a "costs agreement" which Mr Boensch has the right to enforce, and Mr Boensch enforced his rights under the Mortgage by relying on its terms before the Costs Assessor as an answer to Mr Bingham's application for the assessment of legal costs, it was not open to the Costs Assessor to ignore, as he did, the terms of the Mortgage; and his having ignored the terms of the Mortgage is incapable of altering the rights and obligations Mr Boensch and Mr Bingham have in relation to the HC Costs as provided for by the terms of the Mortgage. (Underlining added)
The defendant did not contest that this was the proper characterisation of the reasons of, and critical findings made, by Judge Manousaridis (submissions at [19]).
[8]
The nature of the review: UCPR rule 49.19
Rule 49.19 of the UCPR ('Review of registrar's directions, certificates, orders, decisions and other acts') relevantly provides:
(1) …if in any proceedings a registrar gives a direction or certificate, makes an order or decision or does any other act, the court may, on application by any party, review the direction, certificate, order, decision or other act and make such order, by way of confirmation, variation, discharge or otherwise, as the court thinks fit.
An application for a review of a registrar's decision is to be instituted by notice of motion filed within 28 days of the order or decision to be reviewed: UCPR rr 49.20(1), (2) and (5). (Here, the plaintiff's summons was filed on 24 January 2022 - and was therefore outside the time prescribed by this rule. I address this issue further at [73], below). Although the rule is expressed as requiring the application to be by notice of motion, because there has not been a commencement of proceedings in the Court, a summons is the appropriate originating document: Voicu v The Owners - Strata Plan No. 1624 [2020] NSWSC 296 at [19] (Basten JA); Benjamin & Khoury Pty Ltd v Rahme [2022] NSWSC 766 at [31] (Davies J).
The principles applicable to the review are not in dispute, and no substantive argument was directed towards them by either party. They may (relevantly) be summarised as follows:
1. First, the review does not require demonstration of error, nor is it restricted to a reconsideration of the material before the registrar: Tomko v Palasty (No 2) (2007) 71 NSWLR 61 at [6] (Hodgson JA, Ipp JA agreeing), 52 (Basten JA) ('Tomko'); Liverpool City Council v Estephen [2008] NSWCA 245 at [17] (McColl JA).
2. Secondly, the court "may make its own decision of the review on the basis of the material presented to it by the exercise of a fresh discretion": Hawkins v Barkley-Brown [2010] NSWSC 48 at [22] (Slattery J).
3. Thirdly, the discretion extends "to whether, and if so how, to intervene… There is an onus on a person seeking to have a court set aside or vary a registrar's decision to make out a case that the court, in the interests of justice, should exercise its discretion to do so": Tomko at [7].
4. Fourthly, where a decision "finally determines a party's rights, or which… has a decisive impact on those rights, a court may be more willing to intervene": Tomko at [9].
5. Fifthly, accepting that the review involves discretionary intervention, the starting point is the decision to be reviewed: the Court "does not merely cast that decision to one side and proceed as if it had never been made. While it is for the court to make the relevant decision afresh, it will have regard to the basis on which the decision was made and the material placed" before it: Wily re LED (South Coast) Pty Ltd (2009) 74 NSWLR 428 at [26] (Barrett J).
[9]
The approach of the Manager, Costs Assessment
No particular attention was given to the reasons of the Manager, Cost Assessment, in written, or during oral, submissions by either party.
It is apparent, from what is set out at [31]-[32], above, that the Manager, Costs Assessment, generally approached the question of whether an extension of time should be granted by reference to four criteria: (a) the grounds of review; (b) the explanation for the delay in seeking a review; (c) prejudice to either party; and (d) the strength, or merit, in the application for review. It should be noted that neither side suggested that this approach was erroneous.
It is appropriate to refer to the reasons of the Manager, Costs Assessment, albeit, as I mentioned, neither party did so: Wily at [26]. The following matters should be noted:
1. First, it was accepted by the Manager, Costs Assessment, that the defendant would experience greater prejudice than the plaintiff, and this finding was "demonstrated" by the need to adjourn the hearing in the Federal Circuit and Family Court of Australia if an extension of time were granted. This finding, as earlier noted, involved an acceptance of a submission put by the defendant. In my view, this finding was erroneous and materially affected the decision under review: it is far from clear why, if an extension of time were granted, that would necessitate or mandate an adjournment of the proceedings in that Court. In my view, it would not.
2. Secondly, by far the more important consideration was that a judge of that Court would be determining the precise issue that was, and remained, in significant contest between the parties: that is, whether the plaintiff's liability in costs to the defendant was capped at $100,000, or not - and a hearing that would involve a determination of that issue had been scheduled to occur 11 days after the decision of the Manager, Costs Assessment. Indeed the Manager, Costs Assessment, recognised this (in the context of dealing with prejudice noted the need to adjourn the court hearing "involving this costs dispute": see [32(1)], above), but failed to give effect to the importance of a judicial determination on that dispute.
3. Thirdly, by the decision, the Manager, Costs Assessment, foreclosed the plaintiff's right to appeal the decision of the costs assessor in two respects: by refusing a review by a review panel (s 83(1) of the LPULA Act) and in turn, because no review had been performed by a review panel that precluded an appeal to a court - a right that is only conferred upon an aggrieved party to a "costs assessment that has been the subject of review": s 89 of the LPULA Act. This last point merely serves to emphasise that the decision had a "decisive impact" upon the rights of the applicant: Tomko at [7]. It did not feature in the reasons of the decision under review.
4. Fourthly, in my view, although broadly identifying the correct principles, there were clear statements that, in my view, suggest that a different test was applied. In particular, the following references were made by the Manager, Costs Assessment, reflecting the approach taken: "When considering an application for additional time, compelling submissions addressing the grounds of review are required. Also, fresh supporting material substantiating the grounds of review" (see [31], above). Contrary to those statements, I do not consider these matters are requirements that condition the exercise of the discretion.
In my view, the above matters justify intervention by review. So too does another matter: a Judge of the Federal Circuit and Family Court has held that the plaintiff's liability to pay legal costs to the defendant is capped at $100,000.
[10]
Discussion: why an extension of time should be granted
The defendant (in substance) submitted that the exercise of the court's discretion should be controlled by four factors - being the length of the delay; the reason for the delay; whether the plaintiff has a fairly arguable case; and prejudice to the defendant - relying upon Jackamarra v Krakouer (1998) 195 CLR 516 at [6]-[7]. The defendant submitted further that, although the plaintiff had a "fairly arguable case", the interests of justice favour the refusal of the application.
The applicability of these principles is not in issue. Nevertheless, it is important to restate that the "discretion to extend time is given for the sole purpose of enabling the court to do justice between the parties", and the ultimate question is whether "strict compliance with the rules will work an injustice upon" the plaintiff: Nanschild v Pratt [2011] NSWCA 85 at [38] (McColl JA, Campbell JA agreeing); Tomko at [7].
In what follows, I deal with the arguments raised by the defendant against the order that the plaintiff seeks.
[11]
Delay
In my view the period of the delay (around 5 months) - on its own - does not favour an extension of time.
However, it is not a case where the plaintiff has, by way of example, made a deliberate and considered forensic decision not to challenge the costs assessor's certificate or, by way of further example, sat idly by possibly suggestive of him agreeing that his liability to costs was not capped, but at large. Rather it is, to my mind, a situation whereby the plaintiff was taking steps to contest his obligation to pay legal costs other than in accordance with what he has maintained was agreed between him and the defendant. That is apparent from the following: (a) the plaintiff took steps to challenge the bankruptcy notice that relied upon the cost certificate (and judgment taken out in consequence) by filing an application in the Federal Circuit and Family Court, on 24 September 2021, to set that notice aside; (b) the plaintiff took steps, by notice of motion filed in the District Court on 17 October 2021, to challenge the judgment entered following registration of the certificate - albeit unsuccessfully; and (c) the plaintiff served on the defendant an application for review of the costs assessor's decision on around 18 October 2021 - albeit that that application was not filed until 23 November 2021.
It is true that these matters do not fully explain the delay, but they do, in my view, provide important context. They emphasise that the plaintiff was taking steps to contest the costs assessor's decision, albeit not with the alacrity required by the s 83(1) of the LPULA Act.
[12]
Inadequate explanation for the delay
The defendant raised a number of arguments to the effect that the plaintiff had adduced no evidence explaining the delay or any explanation proffered (or to be inferred) was inadequate.
The defendant sought to argue that the plaintiff was a person who had experience in litigation, and should be taken to know the importance of the rules of court and the need to comply with them. As was put by counsel for the defendant, the plaintiff although a "litigant in person, he is by no means a person who has no experience in matters of this kind".
The plaintiff was cross-examined, at some length, seeking to establish as much. I do not, respectfully, consider that the cross examination established the matter identified. On the contrary, in my view, it demonstrated that the plaintiff as a person preoccupied with other matters including his bankruptcy (which, it should be pointed out, ceased on 26 May 2021) and that he really did not grasp the importance of time limits. That this is so might be illustrated by the cross examination of the plaintiff on an issue that arose in connection with a sequestration order in April 2019, and an application to set the sequestration order aside being out of time. The cross examination extended over a good number of pages, and culminated with the following exchange:
Q. And that incident would have made it clear to you the importance of meeting time limits in these types of proceedings, wouldn't it?
A. If I can focus on it is ‑ one of my arguments is that then I certainly know, if not know but if I get told I understand the importance of it. That's another question. It's just in the whole scheme of things to find time to actually focus on it firstly and, secondly, to understand the applications how they have to be made. Even the application today was done to the wrong court and that's why there's a delay. And I was told, for example, that with a summons it's the right way and there's no time limit. It has to be done as soon as possible but there was no time limit. I believe when you mentioned the notice of motion there is a time limit. But, anyway, that's what I was told. I can only respond to what I've been told. I can't make things up myself and I don't make things up myself.
The plaintiff also sought to argue that, as a consequence of his bankruptcy, "he had no legal standing lodging an appeal to the panel (sic)". The plaintiff was challenged about this during cross examination, and it is by no means clear that he understood the importance of what was suggested to him. In any event, irrespective of what the plaintiff believed, as the Manager, Costs Assessment, found, even if bankruptcy impeded the plaintiff taking steps to contest his liability in the costs assessment process, he was discharged from bankruptcy on 26 May 2021: thereafter there was no legal impediment to the plaintiff proceeding with any application for review based upon him being bankrupt.
It is, I think, fair to say that no clear explanation for the delay has emerged. However, three matters should be noted.
First, in my view, the likely explanation is the fact that the plaintiff is self-represented, unaware of the specific timeframe for lodging a review and most likely pre-occupied with a range of other matters connected to this overall dispute: see [50] and [54], above.
Secondly, although it may be accepted that, generally speaking, where an application is made for an extension of time, an explanation for the delay will be called for, a complementary principle is that the absence of an explanation is not, of itself, disentitling: the fundamental requirement is to act in accordance with the dictates of justice: Voitenko v Zurich Australian Insurance Ltd [2019] NSWCA 229 at [30] (Meagher JA and McCallum JA).
Thirdly, to the extent that any explanation for the delay is less than satisfactory, in such a case 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": Tomko at [14]. In my view, as I explain in [60]ff, below, I consider that the plaintiff's case, based upon the findings of Federal Circuit and Family Court, has "substantial merit".
[13]
The plaintiff has a fairly arguable case
As I have earlier noted, the defendant accepted that the effect of the findings made by Judge Manousaridis were such as to limit the plaintiff's liability in costs to the defendant at $100,000: see [38], above. The defendant, whilst conceding that the plaintiff had a "fairly arguable case", submitted that there were errors in the reasoning of Judge Manousaridis such that "this factor should be given less weight than it normally might" (submissions at [21]). I do not agree. In my view it is impermissible to seek to outflank the decision (in particular the findings made) in this way; rather, the principled way in which to approach the matter is to apply the decision, by its terms. That is, its correctness must be accepted unless and until it is varied by a higher court.
In my view, the findings made by the Federal Circuit and Family Court are legally or, alternatively, practically, significant and they demonstrate where the interests of justice lie: the findings give rise to an issue estoppel that would have preclusive effect upon any costs determination made by a review panel or, at a minimum, they would be highly material (and most likely significantly persuasive) to any costs determination made by a review panel.
I will explain this in what follows - first, I will address whether an issue estoppel arises; and, thereafter, I will address whether the decision (more particularly the key findings), if no issue estoppel arises, would merely be "evidential".
In Blair v Curran (1939) 62 CLR 464, 532, Dixon J concisely expressed issue estoppel in these terms:
A judicial determination directly involving an issue of fact or of law disposes once and for all of the issue, so that it cannot afterwards be raised between the same parties or their privies.
See also Jackson v Goldsmith (1950) 81 CLR 446, 466-467 (Fullagar J); Kuligowski v Metrobus (2004) 220 CLR 363, 373 [21] (the Court) ('Kuligowski'); Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507, 517 [22] (French CJ, Bell, Gageler and Keane JJ). In short, issue estoppel gives preclusive effect to the conclusive determination of some issue of ultimate fact or law so resolved.
In Kuligowski, the Court, adopting what was said by Lord Guest in Carl Zeiss Stiftung v Rayner & Keeler Ltd [No 2] [1967] 1 AC 853, identified the requirements for an issue estoppel to be:
(1) that the same question has been decided; (2) that the judicial decision which is said to create the estoppel was final; and, (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.
During submissions, when the possibility of an issue estoppel arising from the decision of the Federal Circuit and Family Court, was raised with the parties, particularly the defendant, no submissions were made other than that the "law on estoppel in administrative decision-making is different to judicial decision-making".
In my view, there cannot be any doubt about elements (2) and (3), derived from Kuligowski. Nor do I think there is an issue about element (1): Judge Manousaridis identified the issue that he was required to decide, and did decide: viz., in J[83], it was found that the only costs agreement that was entered was constituted by the mortgage and a similar finding was made at J[85]: see [36]-[37], above. That analysis aligns with the defendant's concession contained in the written submissions, par 19: see [38], above. The finding, reflected in those paragraphs of the judgment of Judge Manousaridis, was necessary and fundamental to the decision to set aside the bankruptcy notice. That precise issue is the very same question that was (and is) required to be considered when determining the plaintiff's costs liability to the defendant.
Even if I were wrong about this, and no issue estoppel arose, the findings of the Federal Circuit and Family Court would - and should - be a matter for very careful consideration by a review panel convened to review the costs assessment.
There is a further matter that I consider to be significant. I was advised by the parties that an appeal had been filed by the defendant seeking to appeal the decision of the Federal Circuit and Family Court. Those circumstances, in my view, also favour granting an extension of time: the appeal will determine the question as to the proper characterisation of the arrangement between the plaintiff and defendant, and that is so whether the appeal is allowed or dismissed. Put another way, if my analysis about whether an issue estoppel arises is correct, then the determination by the appeal court will have preclusive effect: it will either confirm the decision of Judge Manousaridis (in which case the plaintiff would be entitled to rely upon that further determination in legal answer to the defendant's claim for costs that exceeded the costs "cap"), or allow the appeal (in which case the defendant would be entitled to rely upon that further determination in claiming the costs that he has).
To sum up: in my view the finding of Judge Manousaridis has preclusive effect or, alternatively, is highly relevant to any costs determination. It follows that the plaintiff's claim has, in my view, "substantial merit". This finding is the most significant matter in my overall assessment, and supports the making of the order the plaintiff seeks. To the extent I am required to find the merits to be "strong" or "exceptional", I consider that they are: Tu'uta Katoa v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] HCA 28; (2022) 96 ALJR 819 at [18].
[14]
Prejudice
The defendant argued that he would be prejudiced if an extension of time is granted. The defendant argues, first, that he is being "frustrated in his attempts to enforce" the judgment entered in the District Court based upon the certificate of determination; and, secondly, by reason of the fact that he has a liability to Mr Bevan (submissions at [22]). (The second argument, it should be noted, was not advanced before the Manager, Costs Assessment). I do not accept either argument.
As to the first matter argued, there is no doubt that the judgment entered in the District Court has generated a number of disputes between the plaintiff and the defendant. But for the decision of the Federal Circuit and Family Court of Australia, then a finding that the plaintiff had unreasonably frustrated the attempts of the defendant to enforce the judgment may well have been open; however, in light of the decision, in my view, it is not.
As to the second matter argued, I do not accept that any additional prejudice to the defendant arises, if an extension of time were granted, in connection with any liability that the defendant has to Mr Bevan. On the defendant's own case that liability accrued well before the parties were provided with the costs assessor's decision. Put another way, the liability that the defendant has to Mr Bevan did not occur as a consequence of the failure of the plaintiff to lodge an application for review within the time period: according to the defendant it arose well before then - at the latest by 12 February 2021 (defendant's affidavit, 20.9.22, annexure A), and the parties were only advised of the decision of the costs assessor some three months later on 12 May 2021. In this respect, I note that this argument was not advanced before the Manager, Costs Assessment.
[15]
The delay in filing the summons seeking a review
As earlier noted (see [29] and [40], above), the plaintiff filed a summons in this Court, seeking a review of the decision of the Manager, Costs Assessment, on 24 January 2022. An application for review of this decision was required to be instituted within 28 days from the date of the order. Assuming that the decision of the Manager, Costs Assessment, was made on 3 December 2021, the plaintiff filed his summons just short of 3 weeks late.
The defendant did not raise any issue about this in the written submissions that it had filed. During oral submissions, however, the point was raised (in fact, in reply to the plaintiff's submissions), and taken, but not developed: it was not suggested, properly in my view, that any additional prejudice or disadvantage occurred as a consequence of this further delay.
In my view, in the absence of any particular prejudice or disadvantage resulting from the failure to file the summons on time, the interests of justice, as explained in earlier parts of these reasons, support the extension of time required.
[16]
Conclusion and orders
For these reasons, I consider that the interests of justice warrant intervention and favour the extension of time sought. I propose to grant it, as well as the further extension of time needed to challenge the decision of the Manager, Costs Assessment: to do otherwise will have the effect of holding him to a liability in costs that has been determined by a Court that he does not have.
I make the following orders:
1. Extend the time for filing a summons seeking a review of the decision of the Manager, Costs Assessment, until 30 January 2022.
2. Set aside the decision of the Manager, Costs Assessment, dated 3 December 2021.
3. Extend the time for lodging an application to review the decision of the costs assessor dated 9 December 2020 until 24 November 2021.
4. Grant an extension of time for the plaintiff to review the decision of the costs assessor dated 9 December 2020.
5. Direct that the costs assessment matter number 2020/296514 be referred to a review panel.
6. Order the defendant to pay the plaintiff's costs of, and incidental to the proceedings in this Court, as a self-represented party.
[17]
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Decision last updated: 21 October 2022