Coshott v Barry

Judgment Introduction 1This is an application for costs arising out of a judgment of McCallum J in the matter of Coshott v Barry & Anor [2012] NSWSC 850. The circumstances giving rise to the orders made by her Honour are sufficiently set out in that judgment and need only be briefly referred to for present purposes. Mr and Mrs Coshott retained solicitors in 2001 in connexion with a number of matters. The retainers were terminated on about 26 August 2003, most of the legal costs charged by the solicitors remaining unpaid. The solicitors obtained an assessment of their costs under s 201 of the Legal Profession Act 1987 (NSW) and certificates of determination were issued under s 208J(1) of the Act. In two of the matters the certificates were filed to take effect as judgments as contemplated by s 208J(3) of the Act, one in the Local Court and the other in the District Court (these are referred as "judgments" in what follows). In the remaining four matters, certificates have not been filed. Mr Coshott was declared bankrupt and the solicitors sought to enforce the six costs assessments against Mrs Coshott. 2Mrs Coshott commenced proceedings in this Court for prerogative relief in respect of the four certificates and the two judgments. An order was made for separate determination of the application for a declaration that all the certificates were issued ultra vires, the costs assessors having no jurisdiction to issue them and orders setting both certificates and judgments aside and restraining the solicitors from seeking to enforce any of the certificates or judgments pending final determination of the proceedings. The Limitation Act argument 3Mrs Coshott contended that the certificates were statute barred pursuant to the combined effect of ss 14(1)(a) and 63 of the Limitation Act 1969 (NSW). It was common ground that, on any analysis as to when the causes of action first accrued, the filing of the two certificates which were filed occurred within six years. As to the other four certificates, it was common ground that the six years period in which the causes of action in contract first accrued had expired. It was also common ground that the solicitors did not commence legal proceedings within six years to recover their costs in any of the matters which were the subject of the assessments. Mrs Coshott submitted that, accordingly, the right to do so had extinguished and none of the certificates or judgments were enforceable, whilst the defendants submitted that the Limitation Act did not apply to the recovery of legal costs under the costs assessment provisions of the Legal Profession Act or, at all events, to the judgments. 4As a preliminary point, the solicitors submitted that Mrs Coshott could not obtain declaratory relief because of the privative clause in s 208K of the Legal Profession Act. McCallum J briefly outlined the nature of this issue and expressed some doubt about the solicitors' contention. However, her Honour did not need, in the result, to give a definitive answer. In respect of the limitation arguments, her Honour concluded that the solicitors' rights of action in relation to the debts quantified in the four certificates were extinguished but that it did not follow that the costs assessors had no jurisdiction to issue them, as was contended by Mrs Coshott. Her Honour pointed out that the certificates "stand as a quantification of the costs billed, which may serve broader purposes than the enforcement of a debt". In the present case, quantification of the costs owing was relevant to the enforcement of a lien: [2012] NSWSC 850 at [53]. Although the solicitors were not entitled to enter judgment in respect of the four certificates that had not been filed [ibid at 56], it was unnecessary to make an order restraining the defendants from either filing the certificates or seeking to enforce them, having regard to the solicitors' agreement not to enforce them pending the determination of the instant application and there being no reason to apprehend that they would act contrary to this agreement. Accordingly, the declaration was refused and the other (dependant) orders necessarily dissolved. Costs are reserved 5McCallum J ordered the proceedings to be re-listed to hear argument as to costs. However, Mrs Coshott sought leave to re-open the earlier hearing to permit reconsideration of her Honour's findings concerning the judgments on the ground that attention had not be drawn by either party to the decision of in Frumar v The Owners of Strata Plan 36957 [2010] NSWCA 172. Reopening the hearing for this purpose could not occur since the earlier orders had been entered but, at all events, her Honour said that she would not have granted leave because Frumar did not suggest a different outcome. Her Honour ordered the question of costs to be reserved. Application to vary conventional order 6On 20 November 2013 the matter came before me. The balance of the proceedings were dismissed on Mrs Coshott's application pursuant to UCPR 29.8 and I ordered that written submissions on the question of costs should be made. The defendants sought an order for costs, including reserved costs, and excluding any costs previously ordered in the proceedings in the following terms: (i)The plaintiff to pay the defendants' costs including their costs of representing themselves on a party/party basis as agreed or assessed including costs reserved; (ii)Pursuant to s 101(4) of the Civil Procedure Act 2005 the plaintiff pay interest on the amounts assessed in respect of the defendants' counsel's fees from the dates of payment. 7For her part, Mrs Coshott contends that she should not be ordered to pay more than 40 to 50 per cent of the defendants' costs of and occasioned by the hearing of the separate of question determined by McCallum J on 27 July 2012. It was submitted that she obtained substantial success in relation to the argument on the Limitation Act since, although McCallum J held that the certificates were not ultra vires and dismissed the motion, the solicitors were unable to file them and, thence, to proceed to execution. 8A successful party will usually be entitled to costs, although it may be sometimes appropriate to make an adjustment as to the extent of that entitlement if, although the result favoured the party, issues were raised in the proceedings as to which the other party was successful. However, differentiation between issues on which the party ultimately successful failed will generally not be attempted unless a particular issue or group of issues is clearly dominant or separable. Ordinarily, costs of the proceedings should be awarded to the successful party without attempting such a differentiation. Even where such differentiation is appropriate, variation of the usual order as to costs will rarely be made if the matters in respect of which the ultimately successful party failed did not take up a significant part of the trial, either by way of evidence or argument. This is a matter of fact and degree, as to which the Court has a wide discretion: Elite Protective Personnel Pty Ltd & Anor v Thomas Salmon (No 2) [2007] NSWCA 373 at [6] - [11]; Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38]. Conclusion 9In this case, McCallum J declined to order the relief sought for the fundamental reason that none of the certificates of determination in question was ultra vires and there was no basis for any order that the certificates be set aside and the two "judgments" entered on those which were filed should be set aside or permanently stayed. However, the solicitors' argument that the Limitation Act did not apply at all, even to the unfiled certificates, failed: her Honour concluded that, although they could not now be filed, the certificates were within the assessors' power to make and effective as quantifications of the debt. 10The transcript of the hearing before McCallum J, it is fair to say, shows that about half of the time taken involved argument on the effect of the Limitation Act. In the end, though Mrs Coshott succeeded as to one part of the Limitation Act argument, the part that failed inevitably led to the refusal of relief. In those circumstances, it seems to me that the usual order for costs ought to be made in the terms sought by the solicitors. Orders (1)The plaintiff is to pay the defendants' costs, including costs reserved and their costs of representing themselves. (2)Pursuant to s 101(4) of the Civil Procedure Act 2005 (NSW) the plaintiff is to pay interest on the amounts assessed in respect of the fees of the defendants' counsel from the dates of payment.