Fordyce v Leung in her capacity as Executrix of the Estate of the late Robert Ho

Court of Appeal (NSW)|2021-10-25|Before: Gleeson JA

Solicitors: P M Fordyce (Self-represented) (Applicant) HWL Ebsworth (Respondents) File Number(s): 2021/295887 Decision under appeal Court or tribunal: District Court of New South Wales Jurisdiction: Civil Citation: - Date of Decision: 15 July 2021 Before: J Smith SC DCJ File Number(s): 2021/18135; 2021/149491

[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.]

Background

Mr Fordyce is a retired solicitor. He was self-represented on the application. Without intending any disrespect, it should be said immediately that the materials relied upon by Mr Fordyce on the present application were deficient in many respects. The affidavit evidence failed to provide a clear explanation of the background to the matter, annex or exhibit the relevant documentary evidence including the costs assessments, judgments, summonses for appeal and related documents or include a chronology of relevant events. What follows is an outline of the background circumstances, as best I can discern on the materials presently before the Court.
The events giving rise to the present disputes begin with costs orders obtained by the Leung parties against Mr Fordyce and PMFPL Pty Ltd (the Fordyce parties) in proceedings in the Court of Appeal in 2015 and in the Equity Division before Kunc J in 2019. The Court was not provided with details of those judgments, nor any Medium Neutral Citations.
It is common ground that the assessment of those costs orders is governed by the Legal Profession Act 2004 (NSW) (the 2004 Act) because the costs orders were made in proceedings commenced prior to 1 July 2015. For an explanation of the transitional provisions following the repeal of the 2004 Act on 1 July 2015 and its replacement by the Legal Profession Uniform Law (NSW) and the Legal Profession Uniform Law Application Act 2014 (NSW), see Voicu v The Owners - Strata Plan No 1624 [2020] NSWCA 52 at [22] ff.
On 28 October 2020, a costs assessor, Mr Christopher Wall, issued an interim costs assessment, described as a "pre-completion determination", pursuant to s 368(2) of the 2004 Act which provides: 368 Certificate as to determination … (2) A costs assessor may issue more than one certificate in relation to an application for costs assessment. Such certificates may be issued at the same time or at different stages of the assessment process.
In his reasons, the costs assessor recorded that the amount claimed in relation to 228 numbered items totalled $291,427.42, for various disbursements such as expenses for expert fees and counsels' fees. The costs assessor rejected a submission by the Fordyce parties that they would suffer severe prejudice if the costs assessor assessed only part of the expenses claimed, without consideration of any claim for professional fees of the solicitors for the Leung parties, as to which the Fordyce parties wished to make objections and submissions, but had not yet had the opportunity as the Leung parties had not sought an assessment of those professional fees.
Although there is no direct evidence, it seems from a published judgment in other proceedings between the parties that the amount of the costs certificate was $284,099.31 (the first costs assessment) and that the costs certificate was filed in the District Court on 21 January 2021: Leung in her capacity as Executrix of the Estate of the late Robert Ho v Fordyce [2021] NSWDC 522 at [3].
The effect of s 368(5) of the 2004 Act is that a filed certificate, "with no further action" is taken to be a judgment of the Court whose jurisdiction is invoked. A detailed explanation of why that is so can be found in Calandra v Murden [2015] NSWCA 231 at [5] (Beazley P, Meagher JA and Leeming JA). The proper characterisation of s 368(5) was discussed in Trad v Harbour Radio Pty Ltd [2016] NSWCA 80. There, the view was expressed at [44] by Basten JA (McColl JA and Ward JA agreeing), that s 368(5) is better characterised as definitional, rather than as deeming, in the sense of treating something as that which it is not.
The second costs assessment followed an application by the Fordyce parties to assess the professional fees of the Leung parties the subject of the costs orders in their favour. On 21 May 2021, the costs assessor issued an interim costs assessment in an amount, apparently about $240,000 (the second costs assessment), which certificate was filed in the District Court, on a date presently unknown.
The 2004 Act provides that a party to an application for a costs assessment who is dissatisfied with a decision of a costs assessor as to a matter of law arising in the proceedings to determine the application, may appeal to the District Court against the decision: s 384(1). As to the scope of "a decision of a costs assessor as to a matter of law", see the discussion in Bobb v Wombat Securities Pty Ltd (No 2) [2014] NSWCA 261 at [23]-[25].
On dates presently unknown, but it seems prior to 15 July 2021, the Fordyce parties commenced separate appeal proceedings in the District Court challenging the first costs assessment and the second costs assessment. The grounds of those appeals, presumably under s 384(1) of the 2004 Act, are unknown.
The Leung parties sought to enforce the first judgment by garnishee proceedings. An amount was paid into court by a third party. The Fordyce parties filed a motion on 8 July 2021 seeking to set aside the judgment entered on 21 January 2021. That application was refused by Judge J Smith SC in the District Court on 15 July 2021.
On 23 September 2021, Mr Fordyce commenced proceedings in the Common Law Division, which have since been transferred to this Court, seeking leave to appeal against the judgment of the District Court of 15 July 2021. Leave is required as the appeal is from an interlocutory judgment or order: District Court Act 1973 (NSW), s 127(2)(a). The relief sought includes that the judgment of the District Court of 21 January 2021 be set aside, notwithstanding that the District Court appeals against the cost assessor's decisions have not yet been determined.
Mr Fordyce does not suggest that he has a right of appeal to this Court against the 21 January 2021 judgment. That depends on whether it is a judgment in "an action" in the District Court for the purposes of s 127(1) of the District Court Act: see Bobb v Wombat Securities Pty Ltd [2014] NSWCA 54 at [2] (Basten JA); Frumar v The Owners of Strata Plan 36957 [2010] NSWCA 172 at [38] (Handley AJA, Macfarlan JA agreeing).
The reasoning in Frumar at [39]-[42], which concerned s 208KF(2)(d) of the Legal Profession Act 1987 (NSW), the predecessor of s 368(5) of the 2004 Act, suggests that since entry of judgment on a filed certificate is a ministerial act, there is no right of appeal to this Court in respect of the "judgment". That analysis is consistent with the scheme of the 2004 Act which provides a right of appeal against a decision of a costs assessor on a matter of law to the District Court (s 384) and a right of appeal by leave against the determination made by the costs assessor, to the appropriate court of tribunal (s 385).
On 24 September 2021, Mr Fordyce sought a stay of the District Court appeal proceedings. Smith DCJ refused that application and made directions for the further conduct of the appeal proceedings: the Fordyce parties are to file and serve any affidavit evidence in support of the appeals by 28 October 2021 and the matters are listed for further directions on 3 November 2021. Mr Fordyce has not sought leave to appeal to challenge the interlocutory orders made by the District Court on 24 September 2021.
On 22 October 2021, Mr Fordyce filed a summons (supervisory jurisdiction) in this Court seeking relief by way of judicial review, including that the judgment of the District Court of 15 July 2021 be set aside. The grounds of the application for judicial review replicate the grounds of the application for leave to appeal from the same judgment.
The parties diverged as to whether the costs assessor has acted beyond power in issuing interim costs assessments, notwithstanding the terms of s 368(2) of the 2004 Act.
The Fordyce parties say that the costs assessor is acting as his own "Court of Appeal" by issuing an interim certificate and then reserving to himself the right to amend or vary that certificate once a final certificate is issued. They say that they have been denied procedural fairness by the costs assessor who has proceeded to assess expenses without regard to the objections and submissions which the Fordyce parties wish to make in relation to the fees claimed by the Leung parties which, according to the submission, impact upon the reasonableness of the expenses claimed by the Leung parties.
The Leung parties say that the costs assessor is acting within power as permitted by s 368(2) of the 2004 Act, by assessing costs in tranches and issuing interim certificates (in relation to matters not disputed or not considered by the costs assessor to be fairly disputed) before proceeding to determine the balance of the items which are disputed and then issuing a final certificate, with an adjustment to the amount finally assessed, taking into account the outcome of the interim certificate and the final assessment.
It can be accepted on the present application that the contention that the Fordyce parties were denied procedural fairness by the costs assessor is at least fairly arguable, without intending to express any preliminary, let alone concluded view.

Disposition of application for an interim stay

The relevant principles applicable to a stay application were referred to in Alexander v Cambridge Credit Corporation Ltd (Receivers appointed) (1985) 2 NSWLR 685 at 693-695. Accepting that Mr Fordyce has an arguable case that he was denied procedural fairness by the costs assessor on the first and second costs assessments, it is not appropriate to grant an interim stay of the District Court appeal proceedings challenging those decisions, pending the determination of the stay motion. That is because Mr Fordyce has not sought to directly challenge the interlocutory orders made by Smith DCJ on 24 September 2021 refusing to stay the appeal proceedings.
In addition, the balance of convenience strongly favours refusal of an interim stay of the appeal proceedings. The Fordyce parties have delayed seeking leave to appeal to challenge the District Court orders of 15 July 2021. The Leung parties have been prejudiced by this delay insofar as they have continued to incur costs in opposing the District Court appeal proceedings and in responding to the costs assessments proceedings, which are continuing.
Insofar as Mr Fordyce seeks an interim stay of the two "judgments" of the District Court, it is not appropriate for this Court to entertain such relief in circumstances where Mr Fordyce is presently pursuing District Court appeals challenging the decisions of the costs assessor on which those judgments are based. In addition, there is a course available to the Fordyce parties under s 386(1) of the 2004 Act, which does not seem to have been taken, to seek an order from the District Court suspending the operation of the costs assessor's decisions until the appeals in the District Court are determined.
The assessment process in the Supreme Court, described as the "disbursements costs assessment" initiated by the Leung parties (2019/236020) and the "fees costs assessment" initiated by the Fordyce parties (2020/313928), is continuing. I am not persuaded that Mr Fordyce has demonstrated there is any good reason to stay either assessment process. Moreover, the balance of convenience favours permitting each assessment process to continue since the costs orders, the subject of assessment, were made in 2015 and 2019. The Leung parties would be prejudiced by delay in the completion of the assessment process. The Fordyce parties did not identify any prejudice to them if the assessment process continues. They can make objections and submissions in relation to those the disbursements and fees (which have not yet been assessed).
Once the costs assessor issues a final costs certificate in each assessment, the Fordyce parties will have the various avenues available to them under the 2004 Act to challenge the certificates issued by the costs assessor: an application for review of the determination under s 373, an appeal as to a matter of law under s 384, or an appeal by leave of the relevant court under s 385(2).

Other matters

Although the stay application by Mr Fordyce has been fixed for hearing on 6 December 2021, it is not desirable that there be multiple interlocutory hearings. Accordingly, I propose to vacate the hearing date fixed for the motion and stand over the motion to the hearing of the leave application. There should be a concurrent hearing of the leave application, and the appeal, if leave be granted, together with the related application for judicial review, on a date to be fixed before a bench of three judges. I direct the Registrar to set both applications down for hearing as soon as convenient and that directions be given for the preparation of a common white folder and for the filing and service of submissions. The parties have leave to approach the Registrar to obtain a date for hearing.

Orders

I make the following orders: 1. Refuse the application of Mr Fordyce for an interim stay in terms of pars 1, 2, 3, 4, 5 and 6 of the notice of motion filed 18 October 2021, pending the determination of the motion. 2. Applicant to pay the respondents' costs of the hearing on 25 October 2021. 3. Vacate the hearing date of the applicant's notice of motion fixed for 6 December 2021 and stand over the motion to the hearing of the leave application. 4. Grant leave to the parties to approach the Registrar to obtain a hearing date of the leave application (as a concurrent hearing with the appeal, if leave be granted) and the judicial review proceedings (No 2021/295887).

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: 28 October 2021

Legal Profession Act 2004(NSW)

Legal Profession Act 1987(NSW)

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