Brierley v Anthony Charles Reeves T/as Kaplan Reeves & Co & Ors

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

12355 of 1999 SIMON BRIERLEY v ANTHONY CHARLES REEVES T/AS KAPLAN REEVES & CO & ORS JUDGMENT 1 The first defendant acted for the plaintiff in personal injury proceedings. There was a costs agreement. The plaintiff's claim was settled for the sum of $5,000,000 inclusive of costs. The first defendant gave the plaintiff both an interim and a final Bill of Costs. The latter was dated 23 December 1997. The costs were paid. The plaintiff later sought to bring an application for an assessment of the costs (disputing the whole bill). 2 On 9 December 1998, a form of application was lodged with the Registry and stamped as filed (Exhibit A). At the time of the lodgment, no fee was paid. It appears that an arrangement was reached between Mr Heckenberg (the solicitor for the plaintiff) and Lena Ruggero (the Proper Officer). Mr Heckenberg's version of the relevant conversation appears in an affidavit sworn by him on 6 April 2000. In the affidavit, it is deposed that the Proper Officer said "Yes, I will accept the application without the filing fee". On 14 December 1998, Mr Heckenberg transmitted a facsimile to her. The facsimile contained the following:- "We request that you waive the filing fee and a reasonable filing fee be paid on completion by the party that has been unsuccessful in this matter".

The evidence is silent as to what happened (if anything) between 14 December 1998 and 19 February 1999. On 19 February 1999, the plaintiff made what is called an "Application to Waiver Cost Assessment Fee". By letter dated 12 March 1999, the court advised that the filing fee had been waived. 3 At this stage, it is convenient to digress to mention certain matters. Whilst they are not relevant to the matters to be determined in these proceedings, they are relevant to other action that is proposed to be taken. 4 Attached to the "Application to Waiver Cost Assessment Fee" is a statutory declaration. It was declared and affirmed by the plaintiff on 19 February 1999. Mr Heckenberg was the witness. The contents of the declaration provide inter alia details of income and assets. In light of the fact that the plaintiff had received a substantial sum pursuant to the settlement, (probably in the order of over $4,000,000) it seems unlikely that the declaration makes a full disclosure of the plaintiff's assets and income. Both the plaintiff and his legal advisers must have been aware that material (which was being provided to the Proper Officer for the purposes of having the prescribed fee waived) would be relied on by her in deciding whether or not the financial circumstances of the plaintiff justified a waiver of payment of the fee. 5 In March or April 1999, the application was referred to a Costs Assessor (Mr Hattersley). He then received submissions on what has been described as a matter of jurisdiction or power. The Costs Assessor determined that he had inter alia no jurisdiction to entertain any part of the application. By letter dated 14 September 1999, he notified the parties of that determination and the reasons therefore. 6 A Summons was filed on 28 September 1999. In substance, it seeks to propound an appeal against the determination of the Costs Assessor. Section 208L of the Legal Profession Act 1987 (the Act) enables the bringing of an appeal against such a determination. The appeal is restricted to a matter of law arising in the proceedings to determine the application for assessment. The plaintiff bears the onus of satisfying the court that the determination should be disturbed. 7 The nub of the dispute between the parties is whether or not the application for assessment has been brought out of time. The effect of the provisions of both the Act and the Legal Profession Regulation 1994 (the Regulation) has been said to impose a limitation period for the making of applications by clients for an assessment of a Bill of Costs, where there has been payment. Section 199 (2) requires that the application be made within the period prescribed by the regulations (see clause 25). For present purposes, the prescribed period is 12 months after the bill was given to the client. It is common ground that it had expired in late December 1998 (shortly after 23 December 1998). 8 The plaintiff's case before the Costs Assessor was that the application was made on the date of filing 9 December 1998 and was therefore brought within time. The first defendant's case was that it was not made until waiver of the filing fee (in March 1999) and was therefore out of time. 9 In these proceedings, the plaintiff is only proceeding now against the first defendant. The second and third defendants were barristers briefed in the proceedings that were settled. Both the plaintiff and the first defendant have been represented by senior counsel. 10 On behalf of the plaintiff, many arguments have been put. Some of them were not put to the Costs Assessor. Indeed, in a number of respects, the case now put is different to what he was called upon to deal with. 11 It suffices to briefly refer to certain of the arguments put on behalf of the plaintiff. It was said that as a matter of statutory construction the application was complete and made upon the filing of the prescribed form (the application for assessment). In addition to this primary stance, there were alternative arguments. There was an argument founded on the presumption of regularity. There were arguments to the effect that in fact there had been a waiver prior to the expiry of the limitation period. There was reference to section 81 of the Supreme Court Act 1970. There was an argument that the determination made by the Costs Assessor was outside the scope of his statutory function. 12 I put aside the question of whether or not the plaintiff should be allowed to advance all of the arguments that have been agitated on the hearing of this appeal ( Chilcotin Pty Ltd & Anor v Cenelage Pty Ltd & Ors (1999) NSWCA 11). It is unnecessary to dwell on that question, as I do not accept any of the arguments. 13 It is now convenient to turn to the relevant provisions of the Act and the Regulation. It is these provisions that govern the making of an application for assessment. 14 Section 199 is the provision that enables a client to apply for an assessment of costs in a bill. It provides that the client may apply to the Proper Officer of the Supreme Court (not to the court itself). 15 The manner of the making of an application for assessment is prescribed by section 203 (it is headed "How is an application to be made"). It is in the following terms:- "(1) An application for assessment is to be made in the form prescribed by the regulations and is, subject to subsection (3), to be accompanied by the fee prescribed by the regulations.

(2) The application must authorise a costs assessor to have access to, and to inspect, all documents of the applicant that are held by the applicant, or by any barrister or solicitor concerned, in respect of the matter to which the application relates.

(3) The application must contain a statement by the applicant that there is no reasonable prospect of settlement of the matter by mediation.

(4) The Proper Officer of the Supreme Court may waive or postpone payment of the fee either wholly or in part if satisfied that the applicant is in such circumstances that payment of the fee would result in serious hardship to the applicant or his or her dependants.

(5) The Proper Officer of the Supreme Court may refund the fee paid under this section either wholly or in part if satisfied that it is appropriate because the application is not proceeded with." 16 Clause 26 prescribes the form of and the fee for such an application. It is in the following terms:- "26 Form of, and fee for, application for assessment of bill of costs

(1) For the purposes of section 203 (1) of the Act, the prescribed form of application for assessment (other than an application for assessment of party/party costs under section 202 of the Act ) is: (a) in the case of an application by the client-Form 1, or

(b) in any other case-Form 2. The application is to be made to the Proper Officer of the Supreme Court in duplicate.

(2) For the purposes of section 203 (1) of the Act, the prescribed fee that is to accompany such an application is the greatest of the following amounts:

(a) $100, (b) 1 per cent of the amount remaining unpaid on the bill of costs at the time the application is made, (c) 1 per cent of the amount of costs in dispute at the time the application is made.

(3) For the purposes of this clause, the amount of costs in dispute is the total amount of costs for those legal services in respect of which the costs claimed are disputed by the person liable to pay them." 17 Section 206 (1) requires the Proper Officer to refer the application to a Costs Assessor to be dealt with under Division 6 of Part 11 of the Act. There are procedural requirements prescribed in the Regulation. 18 The language of section 203 (1) is unambiguous. It is couched in mandatory terms. It stipulates that an application is made by the using of the prescribed form (which in this case is Form 1) and that it is to be accompanied by the prescribed fee (which is not referred to as a filing fee). The reference to subsection (3) is obscure. It seems to be erroneous. Presumably it was intended that the reference be to subsection (4) (this was common ground). If that was the intention, the language of the section contemplates that the application may be made by the use of the prescribed form (without being accompanied by the prescribed payment of fee) where there has been a waiver or postponement of payment of the fee. Also, it may be said to contemplate that the waiver or postponement would take place either prior to or at the time the application is made. The waiver or postponement is discretionary when the Proper Officer is satisfied "that the applicant is in such circumstances that payment of the fee would result in serious hardship to the applicant or his or her dependants." 19 In my view, in the circumstances of this case, the mere receipt of the prescribed form by the Proper Officer on 9 December 1998 did not bring about the making of an application. The plaintiff's submissions did embrace the concept of the filing of the application. Although this was not a matter that was fully argued, I am not satisfied that a filing of an application is contemplated by the procedures implemented by the Regulation. 20 In my view, an application is not made until all of the relevant statutory requirements have been satisfied. The first requirement is to use the prescribed form in the making of the application. Secondly, in a case where the fee is being paid, the prescribed form must be accompanied by the prescribed fee. In a case where the fee is not being paid, there must be either a waiver or postponement of that fee. 21 It would seem that the Proper Officer has in practice accepted and filed the application form and other documentation in the manner of the filing of documents in proceedings in the court. Neither the Act nor Regulation provide any foundation for this practice. Clauses in the Regulation use terms such as inter alia "receipt", "lodged" and "sent" in relation to documentation directed to the Proper Officer (see inter alia clause 26A and 26C). There is no mention of "filing". Indeed, clause 26H (which is headed "Delivery of application for assessment and related documents") prescribes a manner in which inter alia an application for assessment may be made (in the same way as a Bill of Costs may be given under section 195 of the Act). Section 195 identifies 5 ways in which a bill may be given (filing is not one of them). 22 I am not satisfied that there was a waiver of payment of the fee prior to 12 March 1999. Save for what appears in subsections (4) and (5) the Proper Officer is not empowered to relieve a party from compliance with any of the statutory requirements. In my view, neither the arrangement made on 9 December 1998, nor the facsimile transmitted on 14 December 1998, had the effect of bringing about a waiver of payment in the sense contemplated by the Statute. It seems to me that the Proper Officer merely took a course which was regarded as being one of convenience or practicability. The prescribed form was accepted by the Proper Officer pending the plaintiff making arrangements as to the fee. She did not refer the material to a Costs Assessor until after 12 March 1999. 23 In the circumstances of this case, at the time of the expiry of the prescribed period, all of the relevant statutory requirements had not been satisfied. Accordingly, at that time, there was no application on foot in this Court. Thereafter, the plaintiff had no entitlement to make an application under the Act and the filed document was liable to be treated as a nullity. 24 It seems to me that any presumption of regularity has no application in the circumstances of this case. Also, I see no role for the operation of section 81 in the issues that fall to be determined in this case. It has application where there has been a failure to comply with the requirements of either the Supreme Court Act 1970 or the Supreme Court Rules 1970. It applies to proceedings in this Court. Although it has not been fully argued, I am presently disposed to the view that an application for assessment cannot be regarded as a proceeding in this Court in the relevant sense. It was said that the Supreme Court Rules had application to the assessment process. In my view, these rules (which have application to proceedings in this Court) do not apply to a non curial process (such as that governed by procedures prescribed by the Regulation). 25 It is not necessary for me to dwell on the question of whether or not the Costs Assessor has acted outside the scope of his statutory function. In my view, this is not a submission that would lead the court, in the circumstances of this case, to disturb the determination. 26 There are certain other matters which should be noted. The parties by their submissions raised issues which the Costs Assessor was called upon to determine. There was no suggestion by any party that it was a matter which should be determined by a court. In substance, there were questions of whether or not the time for the bringing of the application had expired and whether or not the plaintiff was now able to bring the application. The Costs Assessor was confronted with a challenge to his power to proceed with the assessment. To proceed with an assessment in those circumstances would have been a pointless exercise which would have thrown away further costs. 27 In a practical sense, even if the Costs Assessor had exceeded the scope of his function, that matter would not assist the plaintiff in this case. As he is out of time, the plaintiff is not entitled to have the matter referred for assessment. There would be no utility in disturbing the determination in those circumstances. 28 There is an additional matter that I should mention. The attempt to have the costs assessed may be futile for another reason (see section 208C). It appears from evidence led by the plaintiff that the disputed costs are subject to a costs agreement and that the plaintiff has abandoned a proposed challenge that the agreement was unjust. 29 In the circumstances, the plaintiff has failed to satisfy the court that there is any basis justifying a disturbing of the determination. Accordingly, the appeal must fail. 30 The Summons is dismissed. The plaintiff is to pay the costs of the proceedings. The Exhibits may be returned. 31 Before concluding the conduct of this appeal, I should address two further matters. Firstly, the matter of what seems to be a failure to make full disclosure of assets and income. Secondly, the matter of the error in the Statute (section 203 (1) and the reference to sub-section (3) ). 32 A failure to fully disclose assets and income, gives rise to a serious matter which may require the taking of further action. There may be questions of fraud and of the court having been deliberately misled. There may be questions of offences of a criminal nature having been committed. I refer the papers to the Prothonotary for further consideration. 33 There appears to be an obvious error in the Statute. It can be simply corrected. The error has been extant for many years. Although the Act has been amended on a number of occasions, the correction of this error still has not been addressed by Parliament. It should be corrected as soon as possible. **********

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