Coshott v Barry [2016] NSWCA 169 | Case summary

Court of Appeal (NSW)|2016-07-11|Before: Payne JA, McCallum J, Schmidt J, Adams J

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment

Payne JA: On 4 May 2016, the Registrar of the Court of Appeal made an order dismissing proceedings commenced by Mrs Coshott against Stephen Michael Barry and Martin Pearce Board, under r 13.6 of the Uniform Civil Procedure Rules 2005 (NSW) with costs.
Before the Court is a Notice of Motion dated 23 May 2016 filed on 1 June 2016 seeking the following orders: 1. the orders made on 4 May 2016 be set aside; and 2. the applicant pay the costs thrown away.

Brief facts

The history of these proceedings is an unhappy one.
The underlying proceedings concern costs orders sought and obtained by Mr Barry and Mr Board who are solicitors. Mr and Mrs Coshott conducted a number of legal proceedings in which Mr Barry and Mr Board represented them. The details of those proceedings and the subsequent disputes between Mr and Mrs Coshott and their former legal representatives are not presently relevant. What is relevant is that, ultimately, costs orders were made in favour of Mr Barry and Mr Board against Mr and Mrs Coshott.
Mr Coshott is now bankrupt. Mrs Coshott filed proceedings in the Common Law Division of this Court, file number 2010/234928, disputing her liability to pay Mr Barry and Mr Board's costs.
Without rehearsing all of the relevant details, it seems that there were three hearings in the Supreme Court that formed a basis of the costs dispute. In each of those cases Mr Barry and Mr Board appeared on their own behalf and claimed certain professional costs for those appearances: 1. First, on 27 July 2012, McCallum J heard the parties on three prayers in Mrs Coshott's summons, which were to be separately determined; McCallum J reserved costs. 2. Second, on 27 September 2012, Schmidt J heard an application from Mrs Coshott for a stay of execution of three costs judgments of lower courts. On 8 November 2012 her Honour ordered Mrs Coshott to pay the respondents' costs of that application. 3. Third, on 20 November 2013, Mrs Coshott's proceedings were dismissed by Adams J. On 4 June 2014 Adams J ordered Mrs Coshott to pay the defendants' costs, including the costs earlier reserved by McCallum J.
The only presently relevant proceedings are those which were heard by Adams J. In that case his Honour made an order that: (1) The plaintiff is to pay the defendants' costs, including costs reserved and their costs of representing themselves; [italics added] (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.
In the assessment of that costs order, a challenge was made to the amount claimed on the basis that Mr Barry and Mr Board were solicitors in effect representing themselves and were thus not entitled to be paid professional costs for providing those services. This is the question of principle that Mrs Coshott seeks to have determined in this Court.
There was then an appeal to a review panel of cost assessors. The same argument was advanced. The original assessment was upheld.
There was then an appeal to Balla DCJ in the District Court, heard on 6 November 2015. This appeal concerned: 1. the costs assessments made following the costs orders made by Schmidt J and Adams J (costs assessment file number 2014/357691); and 2. two costs assessments relating to orders made by Taylor DCJ in District Court proceedings 2008/30070 (costs assessment file numbers 2014/335193 and 2014/335210).
As noted above, for present purposes the only relevant determination made by her Honour related to the costs assessments made following the costs orders made by Adams J.
Her Honour found that the costs assessors had acted on the correct principle and, in relation to the 4 June 2014 costs orders, so far as the present question of principle was concerned, the assessors were obliged simply to give effect to the decision of Adams J by quantifying the amount of professional costs incurred by Mr Barry and Mr Board acting on their own behalf.
The matter was remitted by Balla DCJ to the costs assessors who made further orders to conform with the legislative scheme, namely an order relating to the costs assessed and an order relating to the costs of the assessment with respect to each of the costs orders made against Mrs Coshott in the Supreme Court of NSW (i.e., those made on 8 November 2012 by Schmidt J, and those made on 4 June 2014 by Adams J).
Those certificates, in relation to the orders made by Adams J, issued on 30 March 2016 under file number 2014/357691, which are presently relevant are: 1. Amended Certificate of Determination of Costs by Costs Review Panel relating to order made on 4 June 2014; and 2. Amended Certificate of Determination of Costs of Review relating to order made on 4 June 2014.
It is not immediately apparent to me that the present judicial review proceedings encompass the making of these certificates. Ms Castle, who appeared on behalf of Mr Barry and Mr Board, and made helpful submissions clarifying the evidence, submitted that these amended certificates were now the operative documents. That is a matter that no doubt the applicant for judicial review will give close attention.

Proceedings in this Court

Proceedings were commenced in this Court seeking leave to appeal from the decision of Balla DCJ. It was pointed out by the legal representatives for Mr Barry and Mr Board that the appeal was incompetent. So much was accepted by counsel then appearing for Mrs Coshott. Those proceedings were dismissed by consent.
On 29 February 2016, a summons for judicial review was filed by Mrs Coshott.
Unhappily, prior to the submissions and white books being filed, it appears that Mrs Coshott's then solicitor on the record became unwell.
On 6 April 2016, there was no appearance at a directions hearing on behalf of Mrs Coshott before the Registrar. A notice was sent to the address shown for Mrs Coshott on the summons seeking judicial review by the Registry of the Court.
On 4 May 2016, there was again no appearance on behalf of Mrs Coshott and the Registrar struck out the summons for judicial review under r 13.6 of the UCPR with costs.
On 1 June 2016, written submissions and the White Book in relation to the underlying judicial review proceedings were filed, together with the present Notice of Motion.

The argument sought to be advanced on the judicial review application

Mrs Coshott has filed written submissions with the White Book in the judicial review application. I do not propose to set them out in detail.
Broadly put, it is submitted that the definition of "costs" in s 3 of the Civil Procedure Act 2005 (NSW) and/or s 4 of the Legal Profession Act 2004 (NSW) (which was the relevant provision before the Legal Profession Uniform Law 2015 (NSW) came into effect) has the consequence that a self-represented litigant who is a legal practitioner is unable to claim professional costs for the time taken representing his or her own interests. This is because s 3 of the Civil Procedure Act defines "costs" as "costs payable in or in relation to proceedings". Section 4 of the Legal Profession Act 2004 defines "costs" by cross-reference to the term "legal costs" which are in turn defined as "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…"
The applicant for judicial review submits that this statutory language has the effect that Guss v Veenhuizen (No 2) (1976) 136 CLR 47 no longer binds this Court to determine that a legal practitioner is able to claim professional costs for the time taken representing his or her own interests. It is submitted that the statutory language here engaged should be construed as mandating a conclusion that a legal practitioner is unable to claim professional costs for the time taken representing his or her own interests. Detailed reference is made to the more recent cases of Wang v Farkas [2014] NSWCA 29; 85 NSWLR 390 and Wilkie v Brown [2016] NSWCA 128 which each address this issue without deciding it.
Without descending any further into the detail of the argument, it is sufficient that I record my view that the submissions sought to be advanced on Mrs Coshott's behalf are reasonably arguable and raise matters of considerable practical importance. This conclusion, as will become apparent, forms an important background for the exercise of the discretion engaged in determining the present application.

Findings on evidence in the present application

On 11 July 2016, the present application was heard. The applicant read affidavits of Bruce Percy Hocking, Mrs Coshott's former solicitor, sworn on 4 December 2015 and 26 May 2016. The respondents read an affidavit of Stephen Michael Barry sworn 5 July 2016 and tendered a lengthy documentary, "Exhibit SMB 1".
Mr Hocking was cross-examined before me. In his 26 May affidavit, Mr Hocking stated that he was not aware of the show cause hearing on 4 May 2016 and had he been so aware he would have ensured that counsel was present.
With no disrespect intended towards Mr Hocking, it appears that in April and May 2016 the conduct of his sole practice, which has since closed, suffered considerably as a result of his illness.
I was initially troubled that there was no evidence before me from Mrs Coshott about her state of knowledge about the show cause hearing, but I have concluded that I should not determine this matter on that basis.
I accept Mr Hocking's evidence that had he been aware of the show cause hearing he would have ensured that counsel was present.
I also infer from the filing in this Court of the White Books containing detailed written submissions on 1 June 2016 and the appearance by Mr Wilson SC on the present application that there was a serious breakdown in communication between Mrs Coshott and her then legal representatives in April and May 2016 and that the present application is one that Mrs Coshott did not intend by her absence at the 4 May 2016 hearing to abandon.

The utility of the present proceedings

The principal submission made by Ms Castle on behalf of Mr Board and Mr Barry on this motion was that I should not make the orders setting aside the Registrar's order dismissing the summons as to do so would be futile.
Ms Castle submitted that Adams J had made a specific order in favour of her clients, precluding argument on the issue that Mrs Coshott seeks to raise. It will be recalled that Adams J ordered: The plaintiff is to pay the defendants' costs, including costs reserved and their costs of representing themselves.
It was submitted that it was no part of the function of the cost assessor to "second-guess" that order. In effect the costs assessor was only to quantify the amount of costs that it was submitted his Honour had already ordered.
Ms Castle submitted that this outcome was mandated by the decision of this Court in eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd [2015] NSWCA 284; 90 NSWLR 451, in which Basten JA said, at [26]: … it is doubtful that anything in ss 364 and 365 of the [Legal Profession Act 2004 (NSW)] confers on a costs assessor (or review panel) the power to determine the extent of contractual obligations as between a party and his or her solicitor, on a party and party assessment. Looking at the matter from a different perspective, the costs assessment involves the carrying into effect of an order of a court requiring one party to pay the costs of the other. To assert that the other part has no entitlement to receive such a payment is to contradict the effect of the court order. Although the point was not argued, it is difficult to understand any basis in the Legal Profession Acts for a costs assessor to undertake such a course. The assessor would, in effect, be re-determining the very order upon which his or her jurisdiction depends.
I do not regard it as appropriate in the present application to reach any concluded view about Ms Castle's submission.
It is sufficient for present purposes that I regard as reasonably arguable the proposition advanced by Mr Wilson SC that the form of the order made by Adams J does not preclude the judicial review application he advances. That is, if he is correct as a matter of law that the definition of "costs" in s 3 of the Civil Procedure Act and/or s 4 of the Legal Profession Act has the consequence that a self-represented litigant who is a legal practitioner is unable to claim professional costs for the time taken representing his or her own interests, the form of Adams J's orders may not be an insurmountable hurdle to his ultimate success.
Nothing that I have said here precludes both parties from fully developing the arguments outlined in the ultimate judicial review proceedings.

Conclusion on the present application

I am satisfied that I have sufficient power under UCPR rr 36.16 and 49.19 to set aside the 4 May 2016 decision of the Registrar to dismiss the judicial review application. No submission was made to me that for present purposes, I lacked power to make the order Mrs Coshott sought or that anything turned on the precise source of my power.
Those sections provide: r 36.16(2) The court may set aside or vary a judgment or order after it has been entered if: … (b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order… r 49.19 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.
In the exercise of discretion, I have decided to set aside the decision of the Registrar made on 4 May 2016. The factors that have persuaded me to set aside the decision of the Registrar are: 1. first, the submissions made by Mr Wilson SC in the judicial review proceedings about the proper operation of the relevant costs provisions of the Civil Procedure Act and the Legal Profession Act are reasonably arguable and raise matters of importance; 2. second, it is reasonably arguable that the submission advanced by Mr Barry and Mr Board assumes a construction of the orders of Adams J that is inconsistent with his Honour's power to award costs in the Civil Procedure Act; 3. third, in the event that I upheld the decision of the Registrar, as that decision is interlocutory, it would be open to Mrs Coshott to file a fresh summons seeking judicial review; 4. fourth, it is clear on all of the evidence that there has been a dramatic failure of communication between Mrs Coshott and her legal representatives; and 5. fifth, any prejudice to the respondents caused by the setting aside of the Registrar's order can be addressed by costs and by requiring the payment into Court of a proportion of the only amount alleged now owing by Mrs Coshott.

Orders

I was informed from the Bar table by Ms Castle, without demur from Mr Wilson SC, that that the amount in issue in the judicial review proceedings is $65,916.90. Ms Castle sought a further order, in the event that I set aside the order of the Registrar, that this amount be paid into Court. Mr Wilson SC submitted that to require the whole amount to be paid into court would be disproportionate but accepted that his client could do so within 28 days.
The indulgence that Mrs Coshott seeks is a substantial one. She agrees she must pay costs thrown away. More is required. I accept that to order the whole amount to be paid into Court would be disproportionate, however, in circumstances where Mrs Coshott seeks the indulgence of the Court and has caused Mr Board and Mr Barry unnecessary cost and delay, I have decided to set aside the Registrar's order on terms that Mrs Coshott pay into court one third of the amount presently at issue within 28 days.
Accordingly the orders of the Court are: 1. the decision of the Registrar made on 4 May 2016 dismissing proceedings commenced by Mrs Coshott against Stephen Michael Barry and Martin Pearce Board, under r 13.6 of the Uniform Civil Procedure Rules 2005 (NSW) is set aside; 2. Mrs Coshott pay the costs thrown away of the application to show cause heard on 4 May 2016 and this application; 3. Mrs Coshott pay an amount of $22,000 into Court within 28 days of this judgment; 4. if that amount is not paid into Court within 28 days of this judgment, the proceedings are stayed; 5. the matter be referred to the Registrar for directions at 9.00am on Monday, 18 July 2016.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 July 2016

Legal Profession Act 2004(NSW)s 4

Profession Act 2004(NSW)

Coshott v Barry

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