Fong BHNF Fong v Weller

Court of Appeal (NSW)|2024-02-23|Before: Gleeson JA, Mitchelmore JA, Kirk JA, Susan Kiefel J

Solicitors: Oliveri Lawyers (Applicant) Herbert Weller Solicitor (First Respondent) Crown Solicitor for New South Wales (Second Respondent) File Number(s): 2023/00346763 Publication restriction: Nil Decision under appeal Court or tribunal: District Court of New South Wales Jurisdiction: Civil Citation: Weller v Fong BHNF Fong [2023] NSWDC 429 Date of Decision: 11 October 2023 Before: Newlinds DCJ File Number(s): 2021/269122

[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.] HEADNOTE [This headnote is not to be read as part of the judgment] This was a judicial review application concerning a protracted costs assessment dispute between the applicant, Mrs Rosie Fong, and the first respondent, Mr Herbert Weller, a solicitor who had acted for the applicant in Supreme Court proceedings. The applicant and respondent had made an initial costs agreement at the beginning of the proceedings. The respondent later entered into a second costs agreement with a tutor who had been appointed for the applicant due to concerns over her capacity. After a dispute over those costs, and following determinations by a costs assessor then a review panel, the respondent had two judgments entered in the District Court based upon the costs assessment certificates. The applicant applied to the District Court under r 36.15 of the Uniform Civil Procedure Rules to have those judgments set aside. That rule relevantly allows judgments to be set aside if they were entered irregularly, illegally, or against good faith. The first judgment was set aside by consent as having been superseded by the second. The primary judge declined to set aside the second. Mrs Fong raised one ground of review, being that his Honour had erred in law on the face of the record in holding that the initial costs agreement continued with full force and effect notwithstanding the existence of the second costs agreement. Issues also arose as to the procedure adopted below and in the Court of Appeal, and as to costs. The Court (per Kirk JA, Gleeson and Mitchelmore JJA agreeing) dismissed the application with no order as to costs, and held: As to the procedural issues: (1) The Respondent had purportedly registered his judgments pursuant to Pt 7 of the Legal Profession Uniform Law Application Act 2014 (NSW). However, the predecessor to that Act, the Legal Profession Act 2004 (NSW), in fact applied given the costs agreements were made prior to 1 July 2015. That error was not significant given the regime for registering judgments under both Acts is substantially the same: [16]-[19]. (2) The law has an aversion to readily allowing judgments of courts to be re-opened, varied or set aside in light of the principle of finality. That being said, the sort of judgment at issue in this type of case is unusual. Given that relief will be refused here in any event it was unnecessary to address the scope of r 36.15: [24]-[25]. Bingham v Bevan [2023] NSWCA 86; (2023) 111 NSWLR 287; Calandra v Murden [2015] NSWCA 231; D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1, referred to. (3) It was also unnecessary to decide whether the applicant has an available right of appeal under s 127(1) of the District Court Act 1973 (NSW). That issue might be of significance if it appeared that by seeking judicial review, in circumstances where there was a right to appeal, an applicant was circumventing the requirement that leave to appeal be sought for cases involving an amount less than $100,000: [26]-[29]. Amirbeaggi v EB [2023] NSWCA 108; Boral Gas (NSW) Pty Ltd v Magill (1993) 32 NSWLR 501; Weinel v Judge Parsons (1994) 62 SASR 501, noted. As to the ground of review: (4) The appellant identified three claimed problems with the District Court decision, involving issues of abandonment, frustration and unenforceability due to public policy. However, these issues had not been raised in the District Court proceedings. The judge cannot be said to have erred in law by not applying these doctrines when he had not been asked to do so: [42]-[44]. Fisher v Nonconformist Pty Ltd [2024] NSWCA 32; Haritos v Commissioner of Taxation [2015] FCAFC 92; (2015) 233 FCR 315, referred to. (5) His Honour did err in another way. While neither costs agreement was in evidence before this Court, it can be inferred that from the time the second costs agreement was entered into any work done on the matter by the respondent was pursuant to instructions given pursuant to that second costs agreement with the tutor, and not done pursuant to the first costs agreement with the applicant: [45]. That is reinforced by the principle that when a tutor is appointed in proceedings then, subject to any contrary order, they become liable to the other party with respect to any costs order made in the proceedings: [46]. At the least, the first costs agreement may be presumed simply to have become dormant, with no time nor disbursements being incurred pursuant to that agreement: [49]. However, the error of the judge in this regard appears unlikely to be one of law, although that issue was not explored in submissions: [50]. Yakmor v Hamdoush (No 2) [2009] NSWCA 284; (2009) 76 NSWLR 148; Smith v NRMA Insurance Ltd [2016] NSWCA 250; (2016) 77 MVR 480, applied. (6) Even if it is assumed in favour of the applicant that the error was one founding relief in the nature of certiorari, such relief should not be granted as a matter of discretion. A tutor is generally entitled to an indemnity from the legally incapacitated person for costs properly incurred on their behalf. The applicant here is the one ultimately liable to pay the costs. Whatever the exact formalities of what has occurred to date, the applicant has exercised rights to have all of the costs claimed by the respondent assessed and then to have that assessment reviewed. In the circumstances of this case it is time for disputation to end: [52]-[5855]. Steeden v Walden [1910] 2 Ch 393; Murray v Kirkpatrick (1940) 57 WN (NSW) 162; Spina v Permanent Custodians Ltd [2009] NSWCA 206, applied. As to costs (7) There should be no order as to costs. The respondent's response to the judicial review application was unsatisfactory. Initial submissions were filed then, after certain queries were raised by the Court, a further one page submission was provided. Counsel for the respondent indicated orally that he did not rely on the initial written submission but that had not been communicated in the second submission. Submissions made orally by the respondent had not been outlined in either written submission. That potentially denied procedural fairness to the respondent and undermined the Court's ability to consider and discuss the arguments prior to the hearing: [34]-[38]. The determinative issue - discretion - was not one raised by the respondent: [59]. JUDGMENT

Background

As explained below (at [32]), the evidence before this Court was very limited. What follows is taken substantially from the judgment of Newlinds DCJ, or from the submissions of Mrs Fong recording matters said not to be controversial. Mrs Fong began proceedings in the Supreme Court relating to her late husband's estate in early 2014. She retained Mr Weller to act as her solicitor in respect of those proceedings and the two entered a costs agreement in February 2014. Soon thereafter Mr Weller became concerned about Mrs Fong's capacity to instruct him. In September 2014 a report was obtained from a psychiatrist who concluded that Mrs Fong lacked capacity to instruct legal counsel in the proceedings.
Mrs Fong's brother, Mr Charlie Jia, was then appointed as her tutor. In November 2014 Mr Weller entered into a costs agreement with Mr Jia with respect to the proceedings. The costs agreements were not before this Court. Newlinds DCJ noted that they were "relevantly in identical terms" (J [18]). Mr Weller filed a notice of ceasing to act in the Supreme Court proceedings in April 2015. It seems that the proceedings ended up being settled.
In 2017 Mr Weller began proceedings in the District Court asserting his entitlement to costs. Mrs Fong defended those proceedings on various bases, including that she was incapacitated from entering into the costs agreements. She also brought a cross-claim for negligence. Those proceedings were eventually settled, prior to determination, on terms that the claim and cross-claim be dismissed with no order as to costs.
Mr Weller then invoked the jurisdiction of a costs assessor, which was said to have been pursuant to Pt 7 of the Legal Profession Uniform Law Application Act 2014 (LPULAA). In fact, for the reasons outlined at [16] below, that was not the applicable law, although that is not material to the immediate history. It appears that Mrs Fong again contended in the assessment process that she did not have capacity to enter the costs agreement. The costs assessor determined an amount that was owed to Mr Weller. Mrs Fong sought a review of that decision by a costs review panel, which application was substantially unsuccessful. Mrs Fong then filed an appeal from that decision in the District Court, although the appeal was subsequently discontinued.
Mr Weller obtained two certificates from the costs assessments. The first followed the determination by the costs assessor; the second followed the review panel's determination. The review panel's certificate was for a slightly lower sum than the initial assessment. Under ss 70(5) and 87(2) of the LPULAA Mr Weller was able to file those certificates in the District Court which were then "taken to be a judgment of that court for the amount of unpaid money" (as will be discussed below, the Legal Professional Act 2004 (NSW) (LPA) was in fact the applicable statute). He filed the first certificate in the District Court on 4 May 2021 and the review panel certificate on 24 September 2021.
Mrs Fong made an application to the District Court in May 2023 seeking orders that the two deemed judgments be set aside under r 36.15 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) on the basis of irregularity. She had initially sought that that application be consolidated with the appeal proceeding that she had already brought, but it appears that she instead decided to pursue only the r 36.15 application. The r 36.15 application came before the primary judge. Mr Weller conceded in the hearing before his Honour that the later judgment, based upon the review panel decision, had superseded the earlier judgment based upon the costs assessor's assessment. His Honour accordingly ordered that the 4 May 2021 judgment be set aside by consent.
As to the later deemed judgment founded upon the review panel decision, Mrs Fong raised three grounds: 1. there was never any costs agreement or retainer at all between her and Mr Weller because at the time that she executed the costs agreement she had no mental capacity to do so; 2. the entry by Mr Weller into the second costs agreement with the tutor "superseded" the earlier costs agreement that he had executed with Mrs Fong, and therefore the earlier agreement no longer had any force or effect; and 3. the settlement of the initial District Court proceedings brought by Mr Weller involved implied releases between Mr Weller and Mrs Fong in relation to the costs claim.
As to the first, Newlinds DCJ found that it was not established that Mrs Fong did not have capacity to enter the initial agreement in February 2014 (J [25]-[31]). As to the second, his Honour found that there was no express or implied agreement in or connected with the second costs agreement to do away with the first agreement (J [38]). As to the third ground, he found that the settlement did not imply a mutual release. He thus found that "there is no basis for me to conclude that there was any irregularity in what Mr Weller did when he filed the costs certificate and the judgment of 24 September was entered" (J [46]). Accordingly, he found no reason to set that judgment aside.
Mrs Fong applied for judicial review of the decision before this Court. The sole ground of review is set out below at [40]. It concerns only the second of the three issues raised before the primary judge.

Legal context

The law relating to assessment of costs is labyrinthine. There are complexities relevant here with respect to identifying the legislation that applies to the assessment process; then in relation to the potential roles of the District Court; and then in regard to how such matters may be brought to this Court.

Process of appealing costs assessment

Both the parties and the primary judge proceeded on the basis that the regime governing the costs in dispute was the LPULAA (J [1], [5]). In fact, the predecessor to that Act, the LPA, continues to apply to practitioner/client assessments and appeals where the client first instructed the law practice before 1 July 2015: Legal Profession Uniform Law 2014 (NSW), Sch 4, cl 18; Legal Profession Uniform Law Application Regulation 2015 (NSW), reg 59. The two costs agreements relevant here were entered in February 2014 and November 2014, thus the LPA was and is applicable to each of them.
Nothing significant turns on that error. The process of registering certificates as judgments, for example, is almost unchanged between the Acts. Section 70 of the LPULAA relevantly reads: (1) On making a determination of costs, a costs assessor is to issue a certificate that sets out the determination and includes … (5) In the case of an amount of money specified in a certificate that has not been paid, the certificate is, on the filing of the certificate in the office or 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 for the amount of unpaid money. The rate of any interest payable in respect of that amount of money is the rate of interest in the court in which the certificate is filed.
The LPA had an equivalent section, s 368, which relevantly read: (1) On making a determination of costs referred to in Subdivision 2 or 3 of this Division, a costs assessor is to issue a certificate that sets out the determination. … (5) In the case of an amount of costs that has not been paid, the certificate is, on the filing of the certificate in the office or 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 for the amount of unpaid costs, and the rate of any interest payable in respect of that amount of costs is the rate of interest in the court in which the certificate is filed.
Much the same provision is made for registering certificates issued by a review panel under s 87 of the LPULAA and s 379 of the LPA respectively.

Appealing or reviewing costs determinations in the District Court

There are some differences between the two legislative regimes in relation to the process of appealing a determination as to costs. Under s 384 of the LPA there was an appeal as of right to the District Court from the decisions of a costs assessor or a panel as to a matter of law. Under s 385 there was also a broader appeal right by leave. In the case of a practitioner/client assessment relating to a bill, that appeal went to the District Court. In the case of a party/party assessment it went to the court or tribunal that made the costs order (s 385(2)). An appeal under s 385 was "to be by way of a new hearing". The Court could effectively remit a s 385 appeal to a review panel if there had been no determination by such a panel (s 389).
Under s 89 of the LPULAA there is no right to appeal directly to the courts from the decision of a single costs assessor. As for decisions of a review panel, an appeal can be brought either to the District Court or Supreme Court (not limited to matters of law), but only with leave if the matter is in the District Court and the amount of costs in dispute is less than $25,000, and only with leave if the matter is in the Supreme Court and the amount of costs in dispute is less than $100,000. Such an appeal is by way of rehearing and the District or Supreme Court has all the functions of the review panel (s 89).
Here, as noted, Mrs Fong had appealed the decision of the review panel to the District Court but that appeal was ultimately discontinued. The documents relating to that matter were not put in evidence. Counsel for Mrs Fong indicated that her representatives had concluded that it was sufficient and appropriate to proceed with her application to set the judgment aside for irregularity pursuant to UCPR r 36.15. Newlinds DCJ expressed some doubts on that point (J [3]-[11]).
UCPR r 36.15 is in the following terms. 36.15 General power to set aside judgment or order (1) A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith. (2) A judgment or order of the court in any proceedings may be set aside by order of the court if the parties to the proceedings consent.
Mrs Fong rested her argument regarding this rule on a recent judgment of this Court: Bingham v Bevan [2023] NSWCA 86; (2023) 111 NSWLR 287, see at [69]. That case involved a dispute between a barrister and solicitor in which a certificate based on a costs assessment had been entered for judgment. In that regard it was similar to the present dispute, though in Bingham the relationship was governed by the LPULAA. The Court set aside the judgment on the basis that it was entered irregularly because the barrister had no contractual entitlement to payment (see at [65]-[70]). The Court referred to the earlier judgment in Calandra v Murden [2015] NSWCA 231, in which this Court set aside a deemed judgment because at the time of the assessment and when the certificate was filed there was no amount of costs which was unpaid because the respondent had released the other party from liability under a deed of release.
The law has an aversion to readily allowing judgments of courts to be re-opened, varied or set aside in light of the principle of finality: see eg D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 at [34]-[36]. That being said, the sort of judgment at issue in this type of case is unusual in that it is entered as a District Court judgment without there having been any determination by the Court itself. No argument was presented to this Court about the scope of r 36.15, how it interacts with the provisions in the LPA or the LPULAA, or its availability in this case. Given that relief will be refused here in any event it is unnecessary to address the issue further.

Appeal or review in this Court

This case is an application for judicial review of a decision of the District Court. That involves a limited form of review, it being necessary for Mrs Fong to identify some jurisdictional error or error of law on the face of the record.
A question arose in the course of the hearing as to whether or not Mrs Fong could have sought to appeal from the decision of the primary judge. Section 127(1) of the District Court Act 1973 (NSW) provides for an appeal from the District Court as follows: "A party who is dissatisfied with a Judge's or a Judicial Registrar's judgment or order in an action may appeal to the Supreme Court". It is necessary that the decision appealed from be in an "action" in the District Court. That raises an issue of some complexity. It has been held that the notion does not encompass cases where the District Court is itself exercising an appellate function. Thus no appeal lies to this Court from decisions of the District Court which determined an appeal from the decision of a costs review panel, and it is necessary for a party wishing to challenge such a decision to seek judicial review within the supervisory jurisdiction: Amirbeaggi v EB [2023] NSWCA 108 at [10].
However, in this case Newlinds DCJ was not exercising an appellate function. Rather, his Honour was exercising the power conferred by UCPR r 36.15. Counsel for Mrs Fong explained that he had considered the issue of whether an appeal could be brought and concluded that in exercising that function there was still no "action" in the relevant sense.
It is not necessary to determine whether or not that is so. A judicial review application in this Court's supervisory jurisdiction involves more limited review rights than an appeal under s 127 of the District Court Act. In some cases whether or not there was an appeal right could potentially have some significance. One basis for exercising the discretion to decline to grant relief in judicial review cases is if there is another equally effective and convenient remedy which the party could have pursued: see eg Boral Gas (NSW) Pty Ltd v Magill (1993) 32 NSWLR 501 at 508; Weinel v Judge Parsons (1994) 62 SASR 501 at 504. That point might be of significance if it appeared to this Court that by seeking judicial review, in circumstances where there was a right to appeal, the applicant was circumventing the requirement that leave to appeal be sought for cases involving an amount less than $100,000: see District Court Act, s 127(2)(c).
It has not been suggested that this is such a case. There is no need to consider the issue further.

Determination

The applicant sought to establish error of law on the face of the record. The relief sought was that the decision of the primary judge be set aside and in lieu thereof that the District Court judgment entered on 24 September 2021 be set aside. The grant of any such relief is discretionary.
The material that was provided to the Court was, in the end, very limited. Mrs Fong relied on the reasons for judgment of the primary judge along with one affidavit of her solicitor which simply attached the notice of motion which was before his Honour. Mr Weller - who was solicitor on the record for himself in both the District Court and this Court - sought to rely on his own affidavit affirmed on 10 October 2023, which had been read before the primary judge. Mrs Fong submitted that that affidavit did not constitute part of the record. Quite what forms part of the record and why has been the subject of differing views: Ahern v Aon Risk Services Australia Ltd [2021] NSWCA 166 at [22]-[36] per Meagher JA, White JA at [108]-[120], Brereton JA at [148]-[158]; Spencer v Coshott [2021] NSWCA 235; (2021) 106 NSWLR 84 at [51]-[59] per Simpson AJA. It is not necessary to resolve the status of the affidavit here, as nothing contained within it is significant for current purposes.
This Court was not provided with the decisions of the costs assessor or of the review panel, nor with the submissions made by the parties to those two decision-makers, nor with the transcript of the hearing before the primary judge. We were informed that Mrs Fong had not provided his Honour with written submissions.
Before addressing the issues raised, unsatisfactory aspects of the way in which this matter proceeded in this Court should be noted. A four page written submission was filed on behalf of Mr Weller with the name but not the signature of counsel appearing at the end of the submission. Ten days prior to the hearing the associate to the presiding judge emailed the parties noting that only one affidavit had been provided to this Court, that the Court had not been provided with the motion that was before the primary judge, and that Mr Weller's submissions referred to an affidavit which had not been provided to this Court. This email prompted further material being supplied to the Court by each party. Much of that further material did not end up being tendered or read by either side.
On the same day that the associate's email was sent, and after the due date for submissions, Mr Weller filed a further one page submission this time bearing both the name and the signature of counsel appearing for Mr Weller. No explanation was provided in the submission for why it had been filed, nor of what its relationship was with the previous written submission. Mrs Fong, understandably, responded to both submissions in her written reply. Yet in oral submissions counsel for Mr Weller indicated that he did not rely on the first written submission. He indicated that the document was only a draft which should not have been filed.
As for Mr Weller's second written submission, it contained seven sentences with very little in the way of reasoning. The submission did not suggest that the arguments raised in Mrs Fong's primary written submissions had not been raised in terms before the primary judge. Nor had that been put in the first written submission. Yet that submission was made orally. Neither submission raised issues of discretion or a tutor's right of indemnity. Those points were raised by the Court shortly prior to the hearing in another email sent to the parties by the associate of the presiding judge, and the points were then adopted by Mr Weller in oral submissions.
The respondent was required to file and serve a summary of his argument: UCPR, r 59.8(3). That summary should contain all substantive arguments sought to be relied upon. Doing so allows the other party procedural fairness. It also enables the Court to identify and consider the issues in advance: note similarly, as regards appeals, Lake Macquarie City Council v McKellar [2002] NSWCA 90 at [87]-[93]. Mr Weller's failure to provide written submissions outlining the arguments he ultimately sought to rely upon meant that Mrs Fong was potentially prevented from having a fair opportunity to consider and respond to the issues in advance of the hearing. In fact, to his credit, counsel for Mrs Fong was able to deal with them.
Further, following the usual practice of this Court, all members of the Court read the submissions of the parties prior to the hearing (amongst other things) and spent time considering the issues, which were then discussed by the members of the bench prior to the hearing. Justice Kiefel has said of pre-hearing meetings of appeal judges that their "real utility … is to identify problems or matters which may need to be addressed by the parties or the court": "On being a judge", public lecture, 15 January 2013, The Chinese University of Hong Kong. Mr Weller's approach meant that the Court had not been informed of what arguments Mrs Fong sought to reply upon.
In short, Mr Weller's response to the judicial review application was unsatisfactory. These issues have some relevance to the appropriate costs order in this Court, as discussed further below.
Turning then to the matter at issue, Mrs Fong raised one ground in her summons in this Court: Having found that the applicant lost her mental capacity to enter into contracts (and to provide rational instructions) as at 19 November 2014, his Honour erred on the face of the record by holding that the solicitor/client costs agreement between the applicant and the first respondent dated 27 February 2014 continued with full force and effect; and notwithstanding that the first respondent entered into a second costs agreement with the applicant's tutor on 19 November 2014 for the continuation of the proceedings.
In her primary written submissions to this Court Mrs Fong identified three claimed problems with the primary judge's decision, being his Honour's failure to find: (i) An abandonment of the contract, by conduct of the parties; (ii) Frustration of the contract due to the loss of capacity to provide instructions; and/or (iii) Unenforceability of the contract as a matter of public policy.
As noted, in oral submissions counsel for Mr Weller asserted that these matters had not been raised before the primary judge. Counsel for Mrs Fong candidly acknowledged in his oral submissions in reply that the three doctrines had not been raised in terms. However, he indicated that he had submitted below that Mr Weller could not rely on the first costs agreement as a basis for claiming costs from Mrs Fong as it had no legal force or effect. He argued that on the facts as found by the primary judge the only conclusion his Honour could properly have come to was that the first agreement should have been "set at nought".
The primary judge summarised the relevant issue raised before him in these terms: "the entry by Mr Weller into the second costs agreement with the tutor 'superseded' and thus brought to an end the earlier costs agreement that he had executed with Mrs Fong, and therefore it no longer has any force or effect" (J [23]). His Honour treated the issue as whether "the effect of the second agreement is that the first agreement is, by inference or perhaps implication, found to have come to an end either by a consensual termination or otherwise" (at [32]). Counsel for Mrs Fong indicated that the issue had indeed been put in terms of the second costs agreement having being "superseded". That submission drew upon the following statement by this Court in Bingham at [13], addressing a situation where a barrister and solicitor entered one costs agreement soon after having entered another: "because it followed so closely on the heels of the first agreement, it may be assumed that the second superseded the first".
The applicant's claim that the issues had been sufficiently raised in the particular legal terms now put in the written submissions is unpersuasive. Leaving aside pure issues of law - such as those turning on construction of a statute which would have the effect of cutting away the foundation of the decision in question - it will be rare that a decision-maker can be said to have erred in law in not reaching a conclusion on an issue not squarely raised before them: note, analogously, Fisher v Nonconformist Pty Ltd [2024] NSWCA 32 at [47] and [51]; Haritos v Commissioner of Taxation [2015] FCAFC 92; (2015) 233 FCR 315 at [79]-[83]. The three doctrines raised in the submissions involve issues of some complexity and nuance which turn on matters of fact. If they were to be relied upon then they needed to have been put squarely to the primary judge. His Honour cannot be said to have erred in law by not applying these doctrines when he was not asked to do so.
That being said, in the course of argument counsel for Mr Weller ended up conceding that the conclusion of the primary judge was affected by error. That error was not quite of the kinds identified by Mrs Fong in written submissions in this Court, but is close to the argument in the terms it was put to the primary judge. Neither costs agreement is in evidence before this Court but there is nothing to suggest that either was other than an agreement to charge certain fees for work done, consistently with current general practice. Such an agreement involves the client agreeing to pay for work done and disbursements incurred pursuant to instructions to be given from time to time. Here, as explained above, Mr Weller had had concerns about the capacity of Mrs Fong to give instructions on the litigation and had taken steps to investigate this issue then have a tutor appointed. He then entered a costs agreement with that tutor. From that time on there is every reason to infer that any work done on the matter by Mr Weller was on instructions given pursuant to that second costs agreement with the tutor, and not pursuant to the first costs agreement with Mrs Fong.
That factual inference is reinforced by legal principle. When a tutor is appointed in proceedings then, subject to any contrary order, they become liable to the other party with respect to any costs order made in the proceedings: eg Yakmor v Hamdoush (No 2) [2009] NSWCA 284; (2009) 76 NSWLR 148 at [17]-[30] and [45]; Smith v NRMA Insurance Ltd [2016] NSWCA 250; (2016) 77 MVR 480 at [29]-[36]. That principle illustrates that it is the tutor who is understood to control, and be responsible for, the course taken in the proceedings by the litigant in question.
In such circumstances, and in the absence of evidence or any order to the contrary, time spent and disbursements incurred can be presumed to have been spent and disbursed under the costs agreement between the person authorised to conduct the litigation (the tutor) and the solicitor acting in that litigation. The primary judge came close to acknowledging this: [36] Accordingly, it is very difficult to understand how I could impute an intention to both Mr Weller and Mrs Fong that they intended the February contract to come to an end. True it is that during the period that Mr Jia was tutor, it would not have been possible for all of the terms, either express or implied, in the February agreement to be performed, the most obvious being Mr Weller had no obligation to follow the instructions of Mrs Fong in relation to the litigation after the appointment of Mr Jia as tutor, but it seems to me that that is a long way removed from a conclusion that I should impute to both Mr Weller and Mrs Fong an intention to bring that contract to an end.
His Honour thus seemed to accept that from the time the tutor was appointed then, in formal terms at least, he was the one giving instructions to Mr Weller. When the tutor did so, and Mr Weller acted on those instructions, both were giving effect to the costs agreement between them. The first costs agreement may still have been on foot but it may be presumed that it did not operate in fact. At the least, the first costs agreement may be presumed simply to have become dormant, with no time nor disbursements being incurred pursuant to that agreement. This conclusion is distinct from ones based on the legal notions of frustration, abandonment or public policy.
His Honour seems to have been distracted by considering only whether the first costs agreement had "come to an end" as opposed to having been superseded in practice. As counsel for Mr Weller ended up accepting in the course of argument, that was an error. There is no dispute that the costs assessment in issue covers costs incurred both before and after the second costs agreement was entered.
A question then arises as to whether the error was an error of law which could support the claim for certiorari. On its face it looks more like an error of factual reasoning. It is possible that it could be said that there was, for example, a failure to address a substantial, clearly articulated argument: note Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088 at [23]-[25] and [88]. However, making good that argument would require close attention to what had been put to the primary judge. Characterisation of this error was not explored in the parties' submissions, reflecting the fact that the error was not identified in these terms until the oral hearing. It is not necessary to seek to resolve the point. Even if it is assumed in favour of Mrs Fong that the error was one founding relief in the nature of certiorari, such relief should not be granted as a matter of discretion.
As noted, in general a tutor is liable to the other party in proceedings with respect to costs orders. Subject to any agreement or order to the contrary, the tutor is entitled to an indemnity from the legally incapacitated person for costs properly incurred on their behalf: eg Steeden v Walden [1910] 2 Ch 393; Murray v Kirkpatrick (1940) 57 WN (NSW) 162 at 163; Spina v Permanent Custodians Ltd [2009] NSWCA 206 at [147]. Here, thus, Mrs Fong's tutor, Mr Jia, was entitled to be indemnified by Mrs Fong for the costs incurred on her behalf in conducting the litigation. He would have been entitled to have required that Mr Weller's costs be assessed, and to have exercised review and appeal rights in relation to any such assessment. But as the person ultimately on the hook for any costs properly incurred, Mrs Fong would also have had those rights as a third party payer: LPA, ss 302A and 350. We were informed by counsel for Mrs Fong that there had been proceedings in the District Court between Mr Jia and Mr Weller which were discontinued, just as there had been earlier District Court proceedings between Mr Weller and Mrs Fong. We do not know the terms on which the discontinuance of the Weller v Jia proceedings occurred.
Whatever the exact formalities of what has occurred to date, it is apparent that in fact Mrs Fong has exercised rights to have all of the costs claimed by Mr Weller assessed and then to have that assessment reviewed. She then commenced but discontinued an appeal in the District Court from the review decision. She is the one who is ultimately liable to pay those costs. In this context there would be a degree of artificiality in setting aside the judgment of Newlinds DCJ, and then potentially setting aside the deemed judgment which reflected the assessed costs liability, because of an argument that the primary judge incorrectly found that Mrs Fong was directly liable to Mr Weller where in fact she was only indirectly liable.
This discretionary issue was not raised in advance by Mr Weller but the Court raised it with the parties on the morning of the hearing by email. It was apparent that counsel for Mrs Fong was not caught by surprise and was in a position to address the issue. He sought to answer it with two arguments.
First, it was suggested that this Court "should not leapfrog it and act as if Mrs Fong owes the indemnity to the solicitor" when the indemnity was owed by her to Mr Jia. When asked about the substantive significance of this argument, counsel referred to the fact that there had been the subsequent (discontinued) litigation between Mr Weller and Mr Jia, saying it was possible that Mr Jia had already paid some amount towards the liability, which meant that the judgment against Mrs Fong for the full amount should not be upheld. Yet there is no evidence which supports the suggestion. Moreover, if there had been such a payment then it already would have been a partial answer to Mr Weller's claim against Mrs Fong. It could have been raised in the costs assessment process and/or in the r 36.15 application before the primary judge (it is not necessary to determine whether it could only have been raised in one and not the other). That this was not done suggests that the suggestion is a mere spectre. When asked why the prospect of double recovery had not been raised earlier counsel said that "we didn't chase down every rabbit through every hole". That submission illustrates the point.
Secondly, counsel argued that by upholding a judgment based upon direct liability between Mrs Fong and respondent, any possible grounds for challenge that Mr Jia may have had in relation to the costs assessment - for example, arguing that some costs were not incurred on his instructions - would not be capable of being tested. Again, the argument seems more theoretical than real. There is no evidence that any such arguments, or the possibility of there being such arguments, were raised in the various processes undertaken to date. If Mrs Fong's practical ability to test the costs claimed by Mr Weller had significantly been impeded by the role played by Mr Jia as tutor, and he had not assisted her in challenging the costs, then it would be expected that there would be evidence that the matter had been raised in one of the earlier proceedings.
As an example of a possible complaint that Mr Jia might have had about costs incurred under the second costs agreement, counsel for Mrs Fong noted that Mr Weller had suggested that after the appointment of a tutor Mrs Fong in fact continued instructing Mr Weller. Counsel for Mrs Fong suggested that if that was right then Mr Jia might then have been able to complain to Mr Weller that "you didn't keep me in the loop". The suggestion that Mrs Fong might have kept on instructing Mr Weller in fact does little to rebut the suggestion that she has suffered no substantive injustice from the error made by the primary judge as to the basis of her legal liability.
The dispute about costs has been protracted. It relates to costs that were incurred some nine to ten years ago. As noted, there were, apparently, District Court proceedings between Mr Jia and Mr Weller which ended up being discontinued. Similarly, there were District Court proceedings between Mrs Fong and Mr Weller which ended up being dismissed by consent. There was then a contested costs assessment, followed by a determination of the review panel. That was followed by an appeal from the decision of the review panel to the District Court by Mrs Fong, which was discontinued. She then pursued the r 36.15 application before Newlinds DCJ, which in turn has ended up before this Court. What Mrs Fong appeared to be suggesting now is that, in effect, the matter should be remitted to the District Court; she should be held liable directly only for the costs incurred under the first costs agreement; and as regards the costs after entry into the second costs agreement there should be some further process involving Mr Jia and Mr Weller, followed by Mr Jia then claiming from her. That suggested course is as unattractive as it is disproportionate.
It is time for the disputation to end. The possible legal error made by the primary judge does not undermine the ultimate legal liability of Mrs Fong to pay the costs in question. To the extent that relevant error is made out this Court should decline to grant any relief in its discretion.

Conclusion

The applicant's summons should be dismissed. Ordinarily costs would follow the event. In this case, however, Mr Weller's response to the application for judicial review was unsatisfactory for the reasons given above at [34]-[39], and the determinative issue - discretion - was not one raised by Mr Weller. In these circumstances there should be no order as to costs in this Court.

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: 08 March 2024

Legal Profession Act 2004(NSW)

Legal Profession Uniform Law Application Regulation 2015(NSW)

Act, the Legal Profession Act 2004(NSW)

Legal Professional Act 2004(NSW)

(2023) 111 NSWLR 287

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