(f) preparation of the bill of costs.
89 It is also not clear whether any reduction was made in response to the objection to duplication of work between solicitors and counsel, excessive consultation with counsel and unnecessary attendances on the plaintiffs' father. The assessor said that "in the main" he rejected the submissions made on behalf of Claude Cassegrain in these respects. That implies that to some extent the submission was accepted. It is not possible to say how this was reflected in the costs allowed.
90 If the obligation to give reasons requires the specification of items which have been reduced, by what amount, and for what reason, in each instance (Kennedy Miller Television Pty Ltd v Lancken per Sperling J), then it is clear that the reasons were inadequate. Mr Beech-Jones SC for the plaintiffs submitted that it was never intended when the system of taxation of costs was replaced with a system of assessment that a costs assessor should act as a taxing officer upholding, reducing or rejecting individual items of bills of costs. So far as that submission goes, I agree with it. It was not necessary for the assessor to indicate by reference to each of the 1,313 items in the bill of costs which was accepted, which rejected and which varied, and in the latter case, by what amount. However, it was incumbent on the assessor to specify the amount of the reductions for the matters in [88] above, whether costs were reduced for attendances at the hearing before Windeyer J, and if so by what amount, and whether any, and if so what, costs were reduced by reference to the three submissions which were rejected only "in the main". By way of example, it would have been sufficient in my view for the costs assessor to say that instead of the amount claimed of $597 for attendances to file documents he allowed $200 (if that were the figure). It would have been sufficient for him to have said that he reduced the costs claimed by a particular amount where he considered there had been duplication in attendances of the senior solicitor and the paralegal at conferences. Likewise, it would have been sufficient to say that he reduced costs by a particular amount in respect of the derivative action or the security for costs application. Without such specificity neither Claude Cassegrain nor the plaintiffs can know how their submissions on these areas of disputed costs were ultimately dealt with (reg 128(1)(d)(ii)).
91 The costs assessor referred to Turner v Pride [1999] NSWSC 850. That case was a decision of Master Malpass (as his Honour then was). Apart from an observation (at [23]) that the assessment process replaced the taxation process which had involved an item by item consideration and that there would be cases where the assessment task could be properly performed using a global approach, that judgment does not bear upon the question of the adequacy of the assessor's reasons. In Frumar, Giles JA noted that that case provided no warrant for a panel (or assessor) making little more than a statement of the amount which was considered to be fair and reasonable (at [64], 335-336).
92 Both the costs assessor and the panel considered that the reasons were sufficient because in Frumar the Court of Appeal recognised the legitimacy of the approach of an assessor making his or her own assessment of what work was reasonable to be carried out without undertaking a taxation or a point-by-point analysis of an itemised bill of costs. However, in Frumar (at [62]), Giles JA emphasised that where an assessor proceeds by coming to his or her own view as to the work reasonable to be carried out, rather than by allowing, disallowing or adjusting items in an itemised bill of costs, it is necessary, in order that both parties be able to exercise rights of appeal, that they be informed what work the costs assessor thought to be reasonable and how he or she costed the carrying out of the work. The same applies to a panel. Where the costing of such work is made by reference to adjustments to items in a bill of costs, it is essential for the assessor or the panel to quantify the adjustments made in respect of costs that are disputed. That does not necessarily entail a line-by-line taxation of a bill. But it does require specification of what are disputed costs, for example, by reference to costs of a certain kind, and an explanation of what costs were allowed, or what was the amount of reduction from claimed costs, in respect of costs of that kind. In my view, the costs assessor's reasons and the panel's reasons for allowing solicitors' profit costs in the sum of $119,859.95 are inadequate.
93 The earlier analysis of the costs assessor's reasons indicates that the plaintiffs are more likely to have been disadvantaged by the insufficiency of reasons than is Claude Cassegrain. But there is no discretion to refuse appropriate relief once the error of law by insufficiency of reasons is demonstrated. Unless the Court can correct the error itself and determine the consequences which follow, the matter must be remitted to the panel. I consider this further below at [104]-[107].
94 It was not submitted that the reasons for allowing or reducing items of disbursements, including counsel's fees, are inadequate.
Mr Mauduit's Fees
95 It was submitted for Claude Cassegrain that the costs assessor erred in law in allowing $18,530 for Mr Mauduit's fees. It is clear that in allowing that sum, the costs assessor accepted the submission of Thompson Eslick on 2 May 2006 that his fees should be allowed at least to the extent that he provided translation services. Thompson Eslick submitted that at the hourly rate charged by a translation service in Australia called "Associated Translators and Linguists" such translation costs would in any event have exceeded $18,530. In other words, the figure was based upon the hours spent by Mr Mauduit applying what the costs assessor accepted would be an appropriate rate for translation services.
96 It was submitted that the costs assessor erred in allowing this amount because Thompson Eslick were not liable for those fees. Counsel submitted that as Mr Mauduit was not a "law practice" for the purposes of s 4 of the Act, and as he was not engaged by the plaintiffs' solicitors, it was not open to conclude that such amounts were "legal costs" for the purposes of the Act. This submission was based upon applying the definition of "legal costs" in s 4 of the Act to the expression "costs payable" in s 367A. In s 4, "legal costs" are defined to mean amounts that a person has been or may be charged by, or is or may become liable to pay to, a law practice for the provision of legal services including disbursements, but not including interest. However, in s 367A, the word "costs" includes "fees, charges, disbursements, expenses and remuneration" (definition of "costs" in s 302). Sections 352 and 353 deal with two types of assessment. Section 352 deals with an application by a law practice for an assessment of legal costs to which a bill relates. Section 353 deals with the right of a person who has paid or is liable to pay, or who is entitled to receive or who has received, costs as the result of an order for the payment of an unspecified amount of costs made by a court or a tribunal. In relation to an assessment of "costs" the relevant definition is that in s 302. Hence Mr Mauduit's fees could be the subject of a costs assessment notwithstanding that he was not a law practice and that his fees were not a disbursement incurred by the firm of solicitors acting for the plaintiffs. It is sufficient that they were fees, charges, disbursements, expenses or remuneration for which the plaintiffs were liable.
97 It was submitted for Claude Cassegrain that no-one was liable to pay any part of Mr Mauduit's costs and that it ought to have been found that his costs would only be paid if, and to the extent that, the costs assessor made an allowance for it. I understood this submission to be that allowing fees for Mr Mauduit was contrary to the "indemnity principle" that a person ordered to pay costs of proceedings is only liable to pay such costs for which the plaintiff is liable (Adams v London Improved Motor Coach Builders Ltd [1921] 1 KB 495 at 498, 499, 505; Latoudis v Casey (1990) 170 CLR 534 at 543, 563; Cachia v Hanes (1993) 179 CLR 403 at 410; Oshlack v Richmond River Council (1998) 193 CLR 72 at 97, 121; Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184 at 219; Wentworth v Rogers [2006] NSWCA 145; (2006) 66 NSWLR 474 at 486-487 [45]-[50], 510-512 [159]-[166]).
98 The costs assessor concluded that the indemnity principle had not been breached (page 2). It has not been demonstrated that he erred in so finding. The plaintiffs, through their solicitor, acknowledge a liability for Mr Mauduit's fees in excess of whatever would be allowed on assessment. It was not submitted that the previous practice whereby taxing officers required proof of payment before disbursements were allowed is applicable to costs assessments under Pt 3.2 of the Legal Profession Act 2004.
Costs of the Costs Assessment
99 But for my conclusion that the assessor and the panel made errors of law by failing to provide adequate reasons for the assessment of the bill of costs, I would not have interfered with the determination that Claude Cassegrain pay the costs of the costs assessment. The applicable regulation was reg 126. It provides:
" 126 Determination of costs of party/party costs assessment - section 369(3)(b) of the Act
In determining under section 369(3)(b) of the Act by whom and to what extent the costs of the assessment of party/party costs are to be paid, the costs assessor may have regard to the following:
(a) the extent to which the determination of the amount of fair and reasonable party/party costs differs from the amount of those costs claimed in the application for assessment,
(b) whether or not, in the opinion of the costs assessor, either or both of the parties to the application made a genuine attempt to agree on the amount of the fair and reasonable costs concerned,
(c) whether or not, in the opinion of the costs assessor, a party to the application unnecessarily delayed the determination of the application for assessment. "
100 The costs assessor was not bound to reject the plaintiffs' claim for costs of the assessment, or to give the costs of the assessment to Claude Cassegrain, because the bill was reduced by almost 30 percent. There was no error in referring to the concessions made on behalf of the plaintiffs. I understand that part of the assessor's reasons to mean that the assessor considered the plaintiffs' costs application to have been reasonable and for them to have acted reasonably in responding to the objections made to it. Those are proper matters to be taken into account. The absence of a settlement offer and the delays in the provision of the submissions and objections were clearly relevant matters.
101 Section 369(3)(c) of the Act was not in force at the time of the assessor's decision. It provides that where costs are reduced by 15 percent or more on assessment, the costs of the costs assessment are payable by the law practice that provided the legal services concerned or, if the costs assessor so determines, by such persons and to such extent as may be determined by the costs assessor. At the time of the costs assessor's determination, there was not a prima facie rule that if costs were reduced by 15 percent or more, the costs of the costs assessment should be payable by the law practice concerned. That was not a matter which the assessor was obliged to take into account. Indeed, I do not consider that he would have been entitled to apply any such principle as a prima facie rule, as distinct from having regard to the extent to which his determination differed from the amount of the costs claimed.
102 I refer to this matter again in relation to the application for leave to appeal (see [128] below). It is enough to say that by itself there was no error of law in awarding the plaintiffs the costs of the costs assessment.
103 However, because the consequence of the error of law under s 384 will be that the application to the costs review panel to review the bill of costs will be remitted to the panel for redetermination, it will also be necessary to remit the application to review the determination of costs of the costs assessment. That is to say, if on redetermination the panel comes to a different outcome more favourable to Claude Cassegrain, that could affect the discretion in relation to the costs of the costs assessment.
Consequence of Upholding Appeal under s 384
104 Where the panel's decision has not been upheld, s 384(2) empowers the court either to make such determination in relation to the application as in its opinion should have been made by the panel, or remit its decision "on the question" to the panel and order the panel to redetermine the application. The question is "the question the subject of the appeal". The question the subject of the appeal is whether the panel erred in deciding a matter of law arising in the proceedings for review of the costs determination. The panel erred by allowing the charges for GST, by failing to provide sufficient reasons for their decision upholding the costs assessment and in failing to hold that the reasons of the costs assessor were inadequate.
105 Without conducting a merits review based on the papers before the panel, I am unable to say what determination should have been made by the panel after concluding that the costs assessor's reasons were inadequate and that GST should not have been allowed. The panel can use its own knowledge and experience to determine such matters, whereas I would need evidence. Unlike s 385, s 384 does not contemplate the adducing of fresh evidence before the court if the court proceeds under s 384(2) to make such determination as in its opinion should have been made by the panel. Where the error of law is a failure to give adequate reasons and a failure to recognise the inadequacy of the costs assessor's reasons, it would be a rare case where the court could make its own determination of how the application to the panel should have been decided.
106 The inadequacy of reasons of the costs assessor and the panel did not extend to the entirety of the bill of costs. For example, no additional reasons were required in respect of the acceptance of the hourly rate charged by the senior solicitor. Nonetheless, it would not be practicable to remit for redetermination distinct parts of the bill of costs identified in [57] above, even if there were power to do so. It is not known to what extent the costs assessor, and on review, the panel, accepted the submissions that costs were claimed for work done by the solicitor and the paralegal which duplicated the work of counsel or that counsel was used excessively.
107 In any event, s 384(2) does not contemplate that if the appeal on a matter of law is upheld the Court may determine one part of the application for a costs assessment according to its opinion as to how it should have been determined by the panel, and also order the panel (or the costs assessor) to redetermine other part or parts of the application. Where the Court's decision is remitted to the panel, s 384(2)(b) provides for the Court to order the panel to "re-determine the application", that is, the application to review the costs assessor's determination. Even though there was no error of law of the kind alleged by Claude Cassegrain in the allowance of disbursements, except for GST, it is not possible to enter judgment for the amount of disbursements as found by the costs assessor less the correction to be made in respect of GST, and to remit the balance of the application to the panel.
108 Accordingly, as in Frumar, it is appropriate to remit the matter to the panel to redetermine the application for review of the costs assessor's determination. Pursuant to s 384(3) fresh evidence may be received on the redetermination of the application. That is so notwithstanding that on the original application such evidence would not be receivable unless the panel determined otherwise (s 375(3)). On such a redetermination the panel could affirm the costs assessor's determination, or reduce or increase the determination, but must give adequate reasons. If the assessment is again upheld without variation the panel will need to explain the apparent discrepancies in the total amount allowed for disbursements and the individual items of disbursements disallowed to permit a calculation of the effect of deducting charges for GST on the costs and disbursements allowed for pre and post 12 November 2004 work. Of course the panel might amend its determination in respect of disbursements, but it will in any event be necessary for it to re-assess costs and disbursements, excluding GST, for work done up to 12 November 2004 and work done thereafter.
Application for Leave to Appeal
109 Section 385 of the Act provides:
" 385 Appeal against decision of costs assessor by leave